When two groups merge, the 15% minimum tax can apply to a business that never owed it alone.

What the report claims

The release says businesses buying or selling companies in the UAE are finding that the deal itself, rather than either side's standalone numbers, can bring them within scope of the global minimum tax, often after terms are already agreed. Dhruva recommends buyers test the combined-revenue threshold the moment a target is identified, not during contract negotiation, and says any top-up tax should be modelled as a cash cost, allowing for the substance-based allowance, which reduces each year; a separate transitional safe harbour ends for financial years starting on or after 1 January 2027. Dhruva also recommends sellers prepare tax records that stand up to inspection well before a data room opens, since a position that cannot be evidenced invites a lower price, and says both sides should review insurance cover, which frequently excludes a risk already identified during due diligence. These are Dhruva's own findings and recommendations, not statements of law.

What is actually law

The OECD's Pillar Two framework, agreed by more than 140 countries, requires large multinational groups to pay an effective tax rate of at least 15% in every jurisdiction where they operate, with any shortfall collected as a top-up tax. The threshold is a group with consolidated global revenue of EUR 750 million or more in at least two of the last four financial years.

The UAE implemented this through Federal Decree-Law No. 60 of 2023, which amended the corporate tax law to introduce a top-up tax, followed by Cabinet Decision No. 142 of 2024, which set a Domestic Minimum Top-up Tax (DMTT). The Ministry of Finance confirmed the DMTT applies for financial years starting on or after 1 January 2025. The UAE collects the top-up itself, domestically; it has not adopted the OECD's Income Inclusion Rule or Under-Taxed Profits Rule.

Under Article 6.1.1(a) of Cabinet Decision No. 142 of 2024, the combined-revenue test looks at the combined revenue of both groups where two groups merge, as defined in Article 6.1.2, so a merged group can fall into scope from the year it completes. Where a large group instead acquires a stand-alone company rather than merging with another group, that look-back arguably does not apply, and the acquired company's revenue counts only from the date of acquisition.

Who this touches, and who it doesn't

The DMTT applies only to in-scope multinational groups at or above the EUR 750 million consolidated-revenue threshold. For those groups, a UAE entity's Qualifying Free Zone Person status and its 0% rate no longer determine the group's UAE tax bill on their own; if the group's effective rate here is below 15%, the top-up still applies.

It does not apply to the large majority of UAE companies. A standalone owner-managed business, most free-zone companies and SMEs below the threshold continue under the ordinary 0%/9% corporate tax regime and the existing QFZP rules, unchanged by this law.