Overview
The UAE has issued Ministerial Decision No. 133 of 2026, which defines which entities must file a Pillar Two Information Return under Cabinet Decision No. 142 of 2024 (the UAE’s Top-Up Tax regime).(mof.gov.ae)
This article digs into what this means for multinationals doing business in or via UAE-based entities — and what you should do now to comply.
Who Has to File
According to the new decision (applicable from fiscal years starting on or after 1 January 2025), the following entities are required to file a Pillar Two Information Return:
- Each Constituent Entity located in UAE (excluding Investment Entities)
- Each Joint Venture and JV Subsidiary located in UAE
- Stateless Constituent Entities that are reverse-hybrid entities under UAE law
These entities may file the return directly or via a Designated Local Entity on their behalf.(mof.gov.ae)
Compliance Timeline & Data Requirements
| Item | Detail |
|---|---|
| Effective date | Fiscal years starting on or after 1 Jan 2025 |
| Key data required | Profit & loss, constituent entity structure, intra-group transactions, income reports across jurisdictions |
| Who can file | Individual Constituent Entities or Designated Local Entity |
Actionable Steps for Multinations Now
- Identify all in-scope entities: Constituent Entities, JVs, reverse hybrids based in UAE. Map out structures.
- Review data gathering procedures: Ensure systems can capture actions across the group needed for GloBE reporting – revenue, earnings, taxes paid abroad.
- Determine filing route: Decide whether the UAE entities file directly or appoint a Designated Local Entity. Requires clarity and internal agreement.
- Check consistency with group reporting elsewhere: Pillar Two rules affect liabilities in multiple jurisdictions; information may need to match group financials.
- Assess risk & penalties: Where filings are inaccurate or late, consequences under Top-Up Tax or corporate tax laws may follow.
Example Scenario
Acme Global Ltd., an MNE headquartered outside UAE, owns:
- Acme Manufacturing UAE LLC (Constituent Entity)
- Acme JV Arabia (Joint Venture)
- Acme Investment Trust, a reverse hybrid entity established under UAE law
Under MD 133:
- Both the Manufacturing UAE entity and the JV must file the Pillar Two Information Return.
- The Trust, if reverse-hybrid, is also required.
- All three can file directly or via a designated entity.
Why This Matters for Tax Planning
- Cash flow impact: Pillar Two rules impose minimum effective tax rates; topline rates can trigger additional tax liabilities or refusals of deductions elsewhere.
- Deferred compliance cost: Data system upgrades, consolidated reporting, and cross-border agreements take time.
- Reputation & transparency: Clear, accurate reporting is now being watched more closely by tax authorities globally.
Key Takeaways
- The UAE’s Pillar Two Information Return requirement is active for fiscal years starting 1 Jan 2025.
- Entities in UAE that are part of groups must assess whether they fall in scope.
- Early preparation—structure reviews, reporting systems—will make compliance smoother.
- Consult specialized advisors, especially in complex cross-border groups.
Find out if your entities are in scope now—begin internal audits and establish documentation trails. The deadline may be close.