Legislation Details
- Full Title: Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises
- Law Type: Cabinet Resolution
- Law Number: No. (142) of 2024
- Issued Date: 31 Dec 2024
- Effective Date: 01 Jan 2025
- Official Gazette: No. 792
- Sector: Tax
- Status: Active
- Number of Articles: 6
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution imposes a top-up tax on multinational enterprises operating in the United Arab Emirates. The purpose of this tax is to ensure that these large corporations pay a minimum level of tax on their profits, in line with global initiatives to address tax avoidance. The resolution establishes the framework for calculating and collecting this top-up tax, which will apply to fiscal years beginning on or after January 1, 2025. This measure is significant for businesses in the UAE, as it will increase the tax burden on multinational groups and potentially impact their profitability and investment decisions in the country. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024, Art. 1-3)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to levy a top-up tax on multinational enterprises operating in the UAE. The purpose is to ensure that these large corporations pay a minimum level of tax on their profits, in accordance with global initiatives to address tax avoidance and ensure a more equitable distribution of tax revenues. The resolution applies to fiscal years beginning on or after January 1, 2025. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024, Art. 1-2)
What are the key definitions under this law?
The legislation does not specify any key definitions. The text does not provide definitions for terms such as "multinational enterprises" or "top-up tax". (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024)
What are the main obligations and requirements?
The main obligation under this Cabinet Resolution is the requirement for multinational enterprises to pay a top-up tax, as outlined in Article 1. The resolution states that "the top-up tax shall be levied on multinational enterprises in accordance with the cases, terms, conditions, rules, controls and procedures contained in the attachment." However, the attachment containing these details is not provided in the text. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024, Art. 1)
What are the penalties for non-compliance?
The legislation does not specify any penalties for non-compliance with the top-up tax requirement. The text does not mention any fines, sanctions, or other punitive measures for multinational enterprises that fail to pay the top-up tax. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024)
When did this law come into effect?
According to Article 3, this Cabinet Resolution shall enter into force as of January 1, 2025 and shall be published in the Official Gazette. The resolution applies to fiscal years beginning on or after January 1, 2025. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024, Art. 3)
How does this law interact with other UAE legislation?
The Cabinet Resolution references several related UAE laws in its preamble: - The Constitution - Federal Law No. (1) of 1972 concerning the Competences of Ministries and the Powers of Ministers, as amended - Federal Decree-Law No. (28) of 2022 concerning Tax Procedures, as amended - Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, as amended However, the text does not specify how this Cabinet Resolution interacts with or amends these other pieces of legislation. (Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises, 2024)
Source Documents
This article analyses Cabinet Resolution Imposing a Top-up Tax on Multinational Enterprises for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.