Industry Odisha Bureau, Sep 04: India Inc is closely reviewing its UAE tax exposure now. The UAE’s minimum-tax regime sets a 15% floor. Registration for qualifying firms closes on November 30. Large multinational groups face the greatest scrutiny here. Companies are reassessing structures, compliance readiness and data preparation.
The UAE’s minimum tax can reduce previous advantages significantly. Its standard corporate tax rate stands at 9%. Qualifying free-zone income has often enjoyed 0% treatment. For groups within scope, that advantage may now shrink. Not every UAE company will face this 15% floor.
This regime stems from OECD Pillar 2 commitments. The UAE implemented these global minimum-tax rules in January 2025. They apply to groups with consolidated revenue above €750 million. That threshold applies in two of the preceding four years. In dollar terms, this equates to roughly $871 million.
Crucially, this threshold applies at the group level, not per entity. A relatively small UAE subsidiary can still fall within scope. This happens when it belongs to a large Indian-headed multinational group. Many Indian companies are only now grasping this distinction. It significantly widens the regime’s practical reach across UAE operations.
Free-zone structures deserve particular attention under this framework. UAE subsidiaries, free-zone entities and branches can all qualify. Some Indian multinationals are reassessing their free-zone arrangements accordingly. They’re examining potential exposure and available exclusions carefully. This reassessment reflects growing caution rather than confirmed restructuring plans.
Compliance readiness has become a pressing concern for many groups. Some Indian conglomerates have assessed exposure and data readiness since 2024. This requires clarity on group structure, entities and revenue. Companies must also understand their effective tax rates precisely. Tax expert Priyanshi Chokshi has noted rising queries from large Indian multinationals. These queries followed UAE guidance clarifying scope and compliance requirements.
The November 30 deadline specifically concerns registration, not tax payment. Qualifying firms must register within this window under current rules. This distinction matters for companies still finalising their assessments. Missing the registration deadline carries separate implications from tax filing itself.
For India Inc, this development doesn’t signal UAE’s declining appeal. The regime applies specifically to qualifying multinational groups, not universally. Rather, it introduces sharper scrutiny around structure and compliance. Companies are examining, not necessarily abandoning, their existing UAE presence.
As the deadline nears, expect intensified activity around structural review. Indian multinationals will keep evaluating group-level exposure carefully. Compliance and data readiness will remain top priorities. This marks a broader shift toward heightened tax transparency across UAE-based operations.
