EmaraTax Portal Update: Pillar Two Top-Up Tax Now Enabled in UAE

The UAE Federal Tax Authority (FTA) has introduced a significant update to the EmaraTax portal by activating the Pillar Two Top-Up Tax section. This development marks a major milestone in aligning the UAE’s tax framework with the OECD Global Minimum Tax (Pillar Two) initiative.

What is the Pillar Two Top-Up Tax?

The Pillar Two Top-Up Tax is part of the global tax reform led by the OECD, aiming to ensure that large multinational enterprises (MNEs) pay a minimum effective tax rate of 15% on their global income.

If a jurisdiction imposes a lower effective tax rate, a top-up tax is applied to bridge the gap and ensure compliance with global standards.

Key Update in EmaraTax Portal

The EmaraTax portal now includes a dedicated section for Pillar Two Top-Up Tax registration. This allows eligible businesses to:

• Register under the Pillar Two regime
• Review their tax obligations
• Prepare for compliance and reporting requirements

This update indicates that the UAE is actively implementing international tax transparency and anti-base erosion measures.

Who Should Be Concerned?

The new Pillar Two rules primarily apply to:

• Multinational enterprises (MNEs) with consolidated global revenue exceeding €750 million
• Groups operating across multiple jurisdictions
• Entities benefiting from low effective tax rates

Businesses falling within this scope must evaluate whether they are subject to top-up tax obligations in the UAE.

Registration Process in EmaraTax

The registration process for Pillar Two Top-Up Tax follows a structure similar to existing tax registrations such as VAT and Corporate Tax.

• Registration is completed through the legal entity (taxable person) account
• No separate login is required
• Existing EmaraTax credentials can be used

This streamlined approach ensures that businesses can efficiently onboard into the new tax regime.

Why This Update Matters

The activation of the Pillar Two section signals that the UAE is moving toward full implementation of the Global Minimum Tax framework. This has several implications:

• Increased compliance requirements for large businesses
• Enhanced tax transparency
• Alignment with international tax standards
• Potential impact on tax structuring strategies

Businesses should begin conducting impact assessments and reviewing their effective tax rates to ensure readiness.

Practical Next Steps for Businesses

To stay compliant, businesses should:

• Assess whether they fall within the Pillar Two scope
• Review group-wide effective tax rate calculations
• Coordinate with tax advisors for implementation strategies
• Initiate registration in EmaraTax if applicable

Early preparation is critical to avoid compliance risks and potential penalties.

Conclusion

The introduction of the Pillar Two Top-Up Tax section in EmaraTax is a forward-looking step by the UAE Federal Tax Authority. It reinforces the UAE’s commitment to global tax reforms and signals a new era of international tax compliance.

Businesses must act proactively to understand and adapt to these changes to ensure smooth compliance under the evolving tax landscape.