Compliance
Navigating UAE’s New Pillar Two Information Return: What Multinationals Need to Know
Multinational entities in the UAE must understand Pillar Two Information Return requirements under Ministerial Decision No. 133 of 2026—and what this means for their compliance and tax planning.
By NomadicTax Research Team • 5-8 min read • September 5, 2026
## Overview of Pillar Two in UAE
Ministerial Decision No. 133 of 2026, issued on **25 August 2026**, clarifies which entities in the UAE are required to file a **Pillar Two Information Return** under Cabinet Decision No. 142 of 2024 on the Top-Up Tax for Multinational Enterprises. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
Pillar Two (GloBE rules), part of OECD/G20's global tax reform, aims to ensure large multinationals pay a minimum effective tax rate (ETR), limiting base erosion and profit shifting. The UAE has adopted this through its Top-Up Tax and associated reporting requirements. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
## Which Entities Must File?
- Any **Constituent Entity** located in the UAE (excluding Investment Entities) unless exempted. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
- **Joint Ventures (JVs)** and **JV Subsidiaries** based in the UAE. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
- **Stateless Constituent Entities** that are **Reverse Hybrid Entities** under UAE law. These are hybrid structures treated differently across jurisdictions. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
✅ Filing can be done by:
- The Constituent Entity itself
- Or by the **Designated Local Entity** on its behalf. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
## Effective Date & Transition
Filing applies to fiscal years **starting on or after 1 January 2025**, even though the Decision was issued in August 2026. This means many entities are already in scope. Preparation is urgent. ([mof.gov.ae](https://mof.gov.ae/en/news/ministry-of-finance-issues-ministerial-decision-on-requirements-for-filing-pillar-two-information-return/?utm_source=openai))
## Actionable Insights for Multinationals
1. **Assess Structure**
- Map your group structure to identify Constituent Entities, JV entities, and any hybrid entities. Check if any qualify under the categories above.
2. **Implement Reporting Processes**
- Collect financial and tax data aligning with GloBE rules. Early close and quality assurance will be critical.
- Align with Federal Tax Authority standards—consider hiring external specialists where needed.
3. **Monitor Compliance & Penalties**
- Non-compliance risks include penalties under UAE’s corporate tax regime; transparency with relevant disclosures is important.
4. **Plan Tax Strategy**
- Review profit allocation, cost structure, and intercompany arrangements to ensure you aren’t unintentionally elevating ETR risk.
## Case Example
Suppose a UAE-based technology firm has a UK JV and several UAE subsidiaries. The UK JV is wholly owned and undertakes sales in Europe; UAEs entities manage support functions. Under Ministerial Decision 133:
- The JV located in the UK does **not** file the return to MoF UAE.
- All UAE subsidiaries (constituent entities) must file directly or via a Designated Local Entity.
- If one of your UAE entities is a reverse hybrid (e.g., treated as transparent in UAE but opaque elsewhere), ensure disclosure as required.
## Preparing Now
- Review fiscal years starting from 1 Jan 2025 and determine the first filing deadline relevant to your entity.
- Register with FTA/MoF for electronic filing platforms.
- Align internal audit, tax teams, and legal function to implement necessary controls and documentation.
- Stay updated on guidance notes or commentary from MoF regarding interpretations (e.g. small business relief, safe harbors).
**Bottom line**: Pillar Two reporting isn’t just an administrative load—it’s a gateway to legal certainty in the UAE’s global tax commitments. Early preparation ensures peace of mind and a stable tax position.