Compliance
Navigating UAE’s Pillar Two Information Returns: Compliance Essentials
Multinationals operating in the UAE now face new rules under Ministerial Decision No. 133 of 2026 on Top-up Tax, requiring specific entities to file Pillar Two Information Returns starting from fiscal years 2025 – here’s what you need to know to stay compliant.
By NomadicTax Research Team • 5-8 min read • August 27, 2026
## What is the Pillar Two Information Return and Why It Matters
Under the UAE’s Top-up Tax regime (Cabinet Decision No. 142 of 2024), the country has committed to implement the OECD/G20 Inclusive Framework’s **Global Anti-Base Erosion (GloBE)** rules. These rules aim to ensure that large multinational enterprise (MNE) groups pay a minimum effective tax rate globally. The recent Ministerial Decision No. 133 of 2026 clarifies *which entities* within the UAE are required to file the Pillar Two Information Return.([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
Entities located in the UAE that are required to file the Pillar Two Information Return include:
- **Constituent Entities**, excluding Investment Entities;
- **Joint Ventures and JV Subsidiaries** located in the UAE;
- **Stateless Constituent Entities** created as Reverse Hybrids.
These entities can file directly or via a Designated Local Entity.
This requirement applies to fiscal years beginning on or after **1 January 2025**.([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 Steps for Multinationals
1. **Mapping your group**: Identify which of your subsidiaries, joint ventures, or other entities in the UAE qualify under the definitions above.
2. **Determine your fiscal year 2025 entities**: For entities with fiscal years starting 1-Jan-2025 or later, compliance is already required.
3. **Choose a filer**: If you have a Designated Local Entity, coordinate who will submit the Return; otherwise, each Constituent Entity must file.
4. **Gather required data**: The Information Return will likely require detailed financial and operational data consistent with GloBE reporting, including profit, taxes paid, assets, payroll, and more.
5. **Review existing tax policies**: Examine any intercompany arrangements, hybrid structures (especially reverse hybrids), to ensure they align with the UAE’s definitions and rules.
## Example Scenario
Suppose you operate in the UAE via two subsidiaries and a joint venture. Subsidiary A is an Investment Entity—no requirement to file for that entity. Subsidiary B is not an Investment Entity, so that must file. The joint venture (JV) located in UAE must also file. If you have a Designated Local Entity, B and the JV may submit through it.
## Risks of Non-Compliance
- Late or missing returns could result in penalties or enforcement under the UAE Tax Procedures Law.
- Inaccurate or incomplete data may lead to higher Top-up Tax liabilities for the group.
- Reputational risk and increased audit exposure due to international transparency obligations.
## Best Practices to Get Ahead
- Build internal cross-functional teams (tax, finance, operations) to collect, validate, and consolidate GloBE data.
- Invest in reporting systems if you haven’t already—standardize chart of accounts, consistency of accounting policies across entities.
- Engage with external advisors familiar with GloBE implementation, especially given differences across jurisdictions.
- Monitor for further guidance from UAE MoF and FTA—forms, deadlines, and thresholds are likely to be clarified.
**Conclusion**: With the requirement now clearly articulated, multinationals with entities in the UAE should immediately assess whether they are subject to the Pillar Two Information Return obligations. Preparing early will mitigate risk and help ensure smooth compliance when filings become due.