UAE Adopts OECD Guidance on Global Anti-Base Erosion Rules with Introduction of Ministerial Decision No. 88 of 2025

The United Arab Emirates (UAE) is cementing its role as a leader in tax transparency and compliance by fully adopting the OECD’s Global Anti-Base Erosion (GloBE) Rules, a critical aspect of the OECD/G20 BEPS 2.0 initiative. This move comes with the introduction of Ministerial Decision No. 88 of 2025, effective from January 1, 2025. The decision aligns the UAE’s tax regulations with international standards, enhancing the country’s tax environment and furthering its commitment to curbing tax avoidance on a global scale.

A Step Toward Global Tax Consistency

The OECD’s GloBE Rules, part of the broader Pillar Two framework, aim to ensure that multinational enterprises (MNEs) pay a minimum level of tax on income generated from their global operations. These rules are designed to address the challenge of base erosion and profit shifting (BEPS), which has long been a source of concern in the international tax system.

As part of its ongoing efforts to foster a transparent and robust economic environment, the UAE Ministry of Finance (MoF) has introduced Domestic Minimum Top-Up Tax (DMTT) on MNEs, effective from January 1, 2025. This measure complements the Cabinet Decision No. 142 of 2024, ensuring that MNEs in the UAE contribute to a fairer global tax landscape.

Now, with Ministerial Decision No. 88 of 2025, the UAE has formally adopted all OECD guidance on the GloBE Rules, marking a significant step in the country’s alignment with global tax standards. This decision not only solidifies the UAE’s tax policy but also seeks to ease compliance burdens for MNEs operating within its jurisdiction.

Key Highlights of Ministerial Decision No. 88 of 2025

The decision mandates the adoption of six key OECD documents that provide comprehensive insights and administrative guidance on the GloBE Rules. These documents are designed to ensure a consistent and coordinated interpretation of the rules, helping both tax administrations and MNEs navigate the complexities of the new global tax landscape.

1. Consolidated Commentary to the Global Anti-Base Erosion Model Rules (2023)
   This document consolidates all previous commentary on the GloBE Model Rules, offering detailed explanations, clarifications, and examples to aid in consistent application. It includes key discussions on the rules’ objectives, definitions, and practical scenarios.
2. Administrative Guidance on the Global Anti-Base Erosion Model Rules (June 2024)
   This document provides practical instructions for implementing the GloBE Rules, including clarifications on effective tax rate calculations, deferred tax liabilities, and the treatment of specific entities like flow-through and securitization vehicles.
3. Central Record of Administrative Guidance
   Serving as a reference, this document consolidates all updates and clarifications issued by the OECD on the GloBE Rules, ensuring that stakeholders have access to the most up-to-date guidance for consistent application.
4. Administrative Guidance on Articles 8.1.4 and 8.1.5 of the GloBE Rules (January 2025)
   This guidance provides practical insights on how to treat deferred tax assets and liabilities (Article 8.1.4), and how to allocate profits and taxes related to flow-through entities and securitization vehicles (Article 8.1.5).
5. Administrative Guidance on Article 9.1 of the GloBE Rules
   This document focuses on Article 9.1, offering clarification on the treatment of specific tax attributes and their impact on the effective tax rate calculation.
6. GloBE Information Return (January 2025)
   This publication outlines the standardized format for the GloBE Information Return (GIR), which MNEs must submit to tax administrations. It provides a framework for transparency, enabling the proper exchange of data and helping to achieve consistent application of the GloBE Rules globally.

The UAE’s Commitment to Best Practices

Ministerial Decision No. 88 of 2025 is a clear reflection of the UAE’s commitment to aligning its domestic tax policies with the OECD’s international tax framework. By adopting comprehensive OECD guidance on the GloBE Rules, the UAE is ensuring that its tax system remains in sync with global standards, promoting fairness and consistency across jurisdictions.

The UAE’s adoption of the GloBE Rules strengthens its position as a transparent and business-friendly tax hub. At the same time, it underscores the country’s ongoing efforts to reduce opportunities for tax avoidance and base erosion while enhancing compliance and governance in the international tax system.

Concluding Thoughts

With the introduction of Ministerial Decision No. 88 of 2025, the UAE has formally embraced the OECD’s GloBE Rules, contributing to the global fight against tax avoidance and base erosion. This move not only promotes international tax consistency but also simplifies the application of the rules for businesses operating in the UAE, making the country an even more attractive destination for global investment.

As the global tax environment continues to evolve, the UAE’s proactive approach to tax policy demonstrates its commitment to transparency, fairness, and business growth.

For further details, clarification, contributions, or any concerns regarding this article, please contact us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries