Indian Multinationals Brace for UAE Tax Changes

As of September 4, 2026, Indian multinationals are actively assessing their exposure to the UAE's new minimum tax regime, with a critical registration deadline approaching on November 30, 2026. The implementation of the OECD's Pillar 2 global minimum tax rules by the UAE, effective January 1, 2025, mandates a 15% minimum tax rate for large multinational groups with consolidated global revenue exceeding €750 million. This new levy could diminish the tax advantages previously offered by the UAE's 9% corporate tax rate and 0% rate on qualifying free-zone income for some entities.

Even relatively small UAE subsidiaries, free-zone companies, and branches of large Indian groups may be subject to these rules if they are part of a larger multinational structure. Tax experts have observed a significant increase in inquiries from major Indian companies concerning their tax coverage, potential exclusions, and the readiness of their data for compliance. The UAE federal tax authority has recently issued guidance clarifying the scope and compliance requirements for these firms, prompting a reassessment of existing structures by affected businesses.