The UAE’s move to implement the OECD’s Pillar Two framework has taken a significant procedural step forward. On 16 July 2026, the Federal Tax Authority (FTA) issued Decision No. 12 of 2026, laying out the specific timelines and mechanics for registering and deregistering entities for Domestic Minimum Top-Up Tax (DMTT) purposes under Cabinet Decision No. 142 of 2024. The Decision applies retroactively to Fiscal Years starting on or after 1 January 2025.
For Multinational Enterprise (MNE) Groups operating in the UAE, this is the clearest guidance yet on when and how in-scope entities must engage with the FTA on Top-Up Tax matters. Here’s a breakdown of what it means in practice.
Who Does This Apply To?
The Decision applies to any Entity that falls within the scope of Article 1.1 of the annexure to Cabinet Decision No. 142 of 2024 — broadly, UAE entities that are members of MNE Groups subject to the global minimum tax rules. It covers registration, deregistration, and ongoing scope notifications for such entities.
Tax Registration Timelines
In-scope entities must submit a Tax Registration application to the FTA within 7 months from the end of the first Fiscal Year in which they fall in scope.
Transitional relief: entities whose Fiscal Year ends before 30 April 2026 get a fixed deadline instead — they must register by 30 November 2026, regardless of when their 7-month window would otherwise fall.
Tax Deregistration Timelines
An entity must submit a Tax Deregistration application within 6 months of the earliest of:
- the date it ceases to exist, or
- the end of the Fiscal Year in which it leaves an MNE Group and falls out of scope.
Transitional relief: entities ceasing to exist before 30 June 2026 must deregister by 31 December 2026.
In-Scope and Out-of-Scope Notifications
This is one of the more nuanced parts of the Decision, designed to handle MNE Groups whose scope status fluctuates year to year:
- If an MNE Group falls out of scope for a tested Fiscal Year, its member entities must file an out-of-scope notification within 6 months of that Fiscal Year’s end.
- That notification stays valid for the tested year plus the next 4 consecutive Fiscal Years — a 5-year window of relief from re-notifying every year.
- If the Group comes back into scope during that window, the entity must file an in-scope notification within 7 months of the relevant Fiscal Year end.
- If the out-of-scope status holds for the full 5 consecutive years, the entity is required to file a Tax Deregistration application within 6 months of the end of that fifth year — unless it re-enters scope first.
Domestic Designated Filing Entities
Where a Domestic Designated Filing Entity has been appointed under Article 2.2 of the Cabinet Decision annexure, that entity can handle registration, deregistration, and scope notifications on behalf of all members of:
- Domestic Main Group, Domestic Minority-owned Subgroup, or Reverse Hybrid Entity, or
- Domestic JV Group.
This centralizes compliance for group structures rather than requiring each entity to file separately.
Effective Date
The Decision applies to Fiscal Years starting on or after 1 January 2025 and came into effect from its date of issuance following publication in the Official Gazette. All conflicting prior provisions are abrogated.
What This Means for In-Scope Groups
With the 30 November 2026 and 31 December 2026 transitional deadlines now fixed for entities with earlier Fiscal Year ends, MNE Groups with UAE operations should:
- Confirm whether their UAE entities fall in scope of the DMTT rules for Fiscal Years starting on or after 1 January 2025.
- Identify which entities fall under the transitional deadlines versus the standard 7-month/6-month windows.
- Determine whether a Domestic Designated Filing Entity should be appointed to streamline group-wide compliance.
- Build scope-monitoring into annual reporting cycles, given the 5-year validity of out-of-scope notifications and the trigger for deregistration.
Given the layered nature of these timelines — and their interaction with the broader Pillar Two annexure under Cabinet Decision No. 142 of 2024 — groups should assess their position well ahead of the relevant deadlines rather than waiting for them to approach.
A few important operational points
- No exit without settlement. Deregistration will not be approved unless all Top-Up Tax and penalties have been paid in full, and all Top-Up Tax Returns and Pillar Two Information Returns have been filed.
- Once approved, registration remains valid until the earliest of the cessation date, the end of the Fiscal Year the entity left the MNE Group, or any other date the FTA determines.
- If an entity meets the deregistration criteria but fails to apply, the FTA may deregister it at its own discretion, based on the information available.