Indian Inc rushes to align with UAE’s 15% minimum tax as November deadline looms
Indian multinationals are assessing their UAE tax exposure before November's deadline. A new 15% minimum tax could affect their existing corporate tax structures. This global minimum tax rule applies to large groups with significant consolidated global revenue. Companies must register for the levy by November 30 this year. UAE authorities have issued guidance on compliance and scope for these…
As the United Arab Emirates implements its new minimum tax regime, several large Indian multinational corporations are reviewing their exposure and the financial implications of their structures in the country, with the November registration deadline rapidly approaching, according to industry experts. The 15% minimum tax could reduce the appeal of the UAE's 9% corporate tax rate and a 0% levy on qualifying free-zone income for some major multinational groups that fall under the scope of the regime, they explained.
The OECD's Pillar 2 or global minimum-tax rules, as applied by the UAE since January 2025, target multinational groups with consolidated global revenue of at least `750 million ($871 million) over two of the four prior years. This could necessitate additional tax payments when their effective tax rate dips below 15%. Companies falling within the scope of the tax may include small UAE subsidiaries, free-zone companies, and branches of large Indian groups.
Tax professionals state that certain Indian multinational conglomerates have been evaluating their exposure and data preparedness since 2024. Now, multiple other Indian companies falling under the regime are assessing their potential tax liability, reevaluating their freezone structures, and exploring available exclusions as the November deadline looms.
"We are observing a significant surge in inquiries from major Indian multinational companies following the recent scope and compliance guidance issued by the UAE's federal tax authority," said tax expert Priyanshi Chokshi. Among these inquiries are a large pharmaceutical company operating in a UAE free zone and a major multinational corporation with entities in the UAE, India, the UK, Mauritius, and the US.
The UAE's finance ministry recently delineated the entities required to file the Pillar 2 Information Return under the domestic minimum top-up tax (DMTT) regime. The revenue threshold is evaluated at the group level, implying that even a relatively minor UAE entity can fall under the rules if it is part of a sufficiently large multinational group based in India. Companies qualifying for the top-up tax must register for the levy by November 30 this year.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
