Entity Setup

Preparing for UAE’s Pillar Two Filing Requirement: What Multinationals Must Know

The UAE’s new requirements under Ministerial Decision No. 133 of 2026 impose Pillar Two Information Return obligations – here’s how multinational businesses should prepare.

By NomadicTax Research Team • 5-8 min read • September 16, 2026

## Background on Pillar Two in UAE UAE has adopted **Cabinet Decision No. 142 of 2024** to impose a **Top-Up Tax** regime under the OECD’s **Pillar Two (Global Anti-Base Erosion Rules, GloBE)** framework. On **August 25, 2026**, the Ministry of Finance issued **Ministerial Decision No. 133 of 2026**, specifying which entities are required to file the **Pillar Two Information Return** for fiscal years starting **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)). --- ## Entities Required to File - Each **Constituent Entity** in UAE (excluding any Investment Entity). - Each **Joint Venture (JV)** and JV Subsidiary located in UAE. - Each **Stateless Constituent Entity** that is a **Reverse Hybrid Entity** in 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)). Entities may file either **directly** or via a **Designated Local Entity**, which acts as agent for the group. --- ## Practical Steps to Comply 1. **Identify if your entity qualifies** under the definitions: cross-border activities, hybrid/joint venture arrangements, reverse hybrids. 2. **Determine fiscal year**: if your financial year begins **on or after 1 January 2025**, plan to comply. Others may have later timelines.([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)) 3. **Collect required data early**: Routine reporting will require consolidated information from global operations—profit, tax paid abroad, adjustments for GloBE rules. 4. **Choose the filing route**: Direct submission versus through a Designated Local Entity; consider which gives better control or less burden. 5. **Review local tax positions and agreements**: Double tax treaties, tax credits, other local laws may affect top-up tax liability. --- ## Example Scenario Suppose a multinational software firm has a UAE-based joint venture (JV) and operates foreign subsidiaries. The JV is located in UAE and thus must prepare a Pillar Two Information Return. The firm elects to have its domestic holding company in UAE act as the Designated Local Entity to file for all UAE subsidiaries, simplifying coordination. --- ## Risks & Considerations - **Penalties** for non-filing or late filing may be significant under UAE law. - Changes in data interpretation or audit risk where entities misclassify investment entities or reverse hybrids. - Need to monitor international developments—OECD guidance or future ministerial decisions may change definitions or filing requirements. **Category:** Entity Setup **TaxHome:** MiddleEast **Author:** NomadicTax Research Team **ReadTime:** 5-8 min **Published:** true