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UAE: Guidance on application of Pillar Two side-by-side package

Guidance confirms application of latest OECD Pillar Two releases.

july 30, 2026

The United Arab Emirates (UAE) on June 22, 2026, published updated guidance on the domestic minimum top-up tax (DMTT) rules to confirm application of the latest OECD Pillar Two releases (including the side-by-side package and the central record of legislation with qualified status).

The updated guidance confirms that, under the UAE DMTT rules, the following safe harbor provisions may be applied to fiscal years beginning on or after January 1, 2026, when the respective conditions are met:

  • Side-by-side safe harbor,
  • Ultimate parent entity (UPE) safe harbor
  • Substance-based tax incentive safe harbor
  • Simplified effective tax rate (ETR) safe harbor

The update further confirms the extension of the transitional country-by-country (CbC) reporting safe harbor to fiscal years beginning no later than December 31, 2027, and ending no later than June 30, 2029.

Read a July 2026 report prepared by KPMG’s EU Tax Centre

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