UAE Top-Up Tax Registration: FTA Decision No. 12 of 2026 Explained

UAE Top-Up Tax Registration: FTA Decision No. 12 of 2026 Explained

The UAE's Top-Up Tax regime for multinational enterprises (MNEs) introduces an additional tax compliance requirement for businesses falling within the scope. As the UAE implements the international Pillar Two framework, multinational entities not only need to pay close attention on their Top-Up Tax obligations but also to the registration and notification requirements imposed by the Federal Tax Authority (FTA).

The FTA has now issued Federal Tax Authority Decision No. 12 of 2026,  which introduces specific requirements for the registration and deregistration of entities for Top-Up Tax purposes; it also covers the procedures for notifying the FTA when an entity falls in scope or out of scope.

The Decision was issued on 16 July 2026 and applies to Financial Years starting on or after 1 January 2025.

This article explains the key requirements and deadlines businesses should follow.

What Is FTA Decision No. 12 of 2026?

Federal Tax Authority Decision No. 12 of 2026 sets out the requirements for:

• Tax registration for Top-Up Tax purposes
• Deregistration from Pillar 2
• Notification for in-scope entities
• Out-of-scope notifications and
• Registration and notification procedures where a Domestic Designated Filing Entity has been appointed.

The Decision is particularly applicable to the entities that form part of an MNE Group that falls within the scope of UAE's Top-Up Tax rules.

Importantly, the Decision is applicable from  Fiscal Years starting on or after 1 January 2025.

When Does UAE Top-Up Tax Apply?

The Decision itself does not require all the conditions determining whether an MNE Group falls within the scope of Top-Up Tax regime. Instead, it refers to Article 1.1 of the Annexure to Cabinet Decision No. 142 of 2024.

Therefore, the businesses should first check whether their MNE Group falls within the scope of the Top-Up Tax rules before taking the registration and notification obligations under FTA Decision No. 12 of 2026.

Once an entity is falls within the scope, the relevant registration or notification deadline needs to be monitored carefully.

UAE Top-Up Tax Registration Deadline

The most important decision is relates to the deadline for registering an entity for Top-Up Tax purposes.

An entity which is subject to Top-Up Tax must submit the application for Tax registration to FTA within:

7 months from the end of the first Fiscal Year in which the entity falls in scope.

This means businesses should identify their first fiscal year in scope and calculate the seven-month period from its end.

Special Transitional Deadline for Certain Entities

The Decision gives a specific transitional rule.

If an entity has a Fiscal Year ending before 30 April 2026, it must submit its Top-Up Tax registration application:

On or before 30th November 2026.

This transitional deadline is specifically important for entities whose first  Fiscal Year in scope ended before the specified date.

Example: Top-Up Tax Registration Deadline

Suppose an entity's first Fiscal year in scope ends on 31 December 2026.

As per the rule, the entity will have seven months from the end of that Fiscal Year to submit its Top-Up Tax registration application.

Businesses should therefore required to establish an internal compliance calendar well before the deadline rather than waiting until the final month.

What About Top-Up Tax Deregistration?

FTA Decision No. 12 of 2026 is addressing the de registration obligation also.

An entity may cease to be out of scope for UAE Top-Up Tax rules. For example, because it ceases to exist or leaves an MNE Group in scope and is no longer within the scope of the regime.

In such circumstances, the entity must submit a Tax Deregistration application.

The application must be submitted within:

6 months from the earliest of:

1. The date in which the entity ceases to exist or

2. The end of the Fiscal Year in which the entity leaves the MNE Group and is no longer in scope.

Transitional Deregistration Deadline

The Decision also have a deadline for transition

An entity that ceased to exit before 30 June 2026 should submit its Top-Up Tax deregistration application:

On or before 31st December 2026.

Businesses falling under this transitional rule should not wait until their specific deadline.

Top-Up Tax Deregistration Is Not Automatic

The entity cannot be deregistered from Top up Tax unless it has:

• Make settlement of all Top-Up Tax liability
• Settled all penalties applicable
• Filed all pending Top-Up Tax Returns
• · Filed all required Pillar Two Information Returns.

In short, simply ceases to be within the Top-Up Tax regime does not automatically end the entity's compliance obligations.

When Does Top-Up Tax Registration End?

When the deregistration application has been approved by FTA, the entity's Top-Up Tax registration remains valid until the earliest of:

1. The date on which the entity ceases to exist

2. The end of the Fiscal Year in which the entity leaves the MNE Group or

3. Any other date determined by FTA.

This provides a clear rule for determining the end of the entity's Top-Up Tax registration.

Can the FTA Deregister an Entity Without an Application?

Yes.

The Decision states that where a Registrant meets the conditions for deregistration but has not submitted the deregistration application, the FTA may, at its discretion and based on the available information, deregister the entity.

However, businesses should not wait on the FTA to take this step.

It is advisable for the entity to actively monitor its own Top-Up Tax compliance and submit the required deregistration application when required.

What Is an Out-of-Scope Notification?

Not all MNE Group will fall within the scope of Top-Up Tax rules for every Fiscal Year.

The Decision therefore introduces an out-of-scope notification requirement.

Where an entity is a member of a MNE Group and that group ceases to be in scope for the tested Fiscal Year, the entity must submit an out-of-scope notification with the FTA.

The deadline is:

6 months from the end of the tested Fiscal Year.

How Long Does an Out-of-Scope Notification Remain Valid?

This is an important feature of this Decision.

An out-of-scope notification remains valid for:

The tested Fiscal Year plus the subsequent 4 consecutive Fiscal Years

Unless the entity becomes subject to in-scope notification requirement during that period.

This means an entity does not necessarily require to submit a new out-of-scope notification each  year if the original notification continues to remain valid under the Decision.

What Happens If the Entity Becomes In Scope Again?

An entity that comes in scope again during a Fiscal Year, while an earlier out-of-scope notification remains valid, must submit again an in-scope notification.

The deadline for the in-scope notification is:

7 months from the end of the tested Fiscal Year.

This creates a significant monitoring obligation for businesses.

Being an out of scope in one year does not necessarily mean the business will remain out of scope indefinitely.

What Happens After Five Consecutive Years Out of Scope?

If an out-of-scope notification remains valid for 5 consecutive Fiscal Years, the entity must submit a Tax Deregistration application within

6 months from the end of the fifth consecutive Fiscal Year

unless the entity falls in-scope notification requirement under the Decision.

Hence the businesses should continue monitor their Top-Up Tax status even during longer periods when they are out of scope.

Domestic Designated Filing Entity: Who Handles the Registration?

The Decision provides a special mechanism where a Domestic Designated Filing Entity can be appointed as the representative entity under UAE Top-Up Tax rules.

In such cases, the Domestic Designated Filing Entity can submit

• Tax application for registration
• Tax Deregistration application
• In-scope notification
• Out-of-scope notification

on behalf of all members of in scope groups.

This mechanism can simplify the compliance requirements where multiple entities fall within the relevant domestic structure.

UAE Top-Up Tax Compliance Timeline

What Should UAE Businesses Do Now?

MNE Groups and affected UAE entities should follow the below steps.

1. Determine whether the group is in scope

Review the applicable provisions of Cabinet Decision No. 142 of 2024 and determine whether the MNE Group falls within the UAE Top-Up Tax regime.

2. Identify the first in-scope Fiscal Year

The registration deadline is linked with the first Fiscal Year in which the entity falls within the scope.

3. Determine the applicable registration deadline

Check on under which the registration deadline falls, general seven-month rule or the transitional 30 November 2026 deadline applies.

4. Review existing group structures

Identify entities that may enter or leave the MNE Group and monitor their impact on Top-Up Tax registration status.

5. Establish an annual scope-monitoring process

A group that is out of scope today may become in scope later

6. Maintain Top-Up Tax compliance records

Maintain records of

• Top-Up Tax registrations
• Top-Up Tax Returns
• Pillar Two Information Records
• In-scope notifications
• Out-of-scope notifications
• Deregistration applications
• FTA communications

7. Review Domestic Designated Filing Entity arrangements

Where applicable, determine whether a Domestic Designated Filing Entity can centralise the relevant registration and notification procedures.

Frequently Asked Questions

1. What is the UAE Top-Up Tax registration deadline under FTA Decision No. 12 of 2026?

An entity falls within scope must generally submit for registration application within 7 months from the end of the first Fiscal Year in which it is in scope. A special transitional deadline of 30 November 2026 applies to entities with a Fiscal Year ending before 30 April 2026.

2. When does an entity need to deregister for UAE Top-Up Tax?

An entity generally required to submit a Tax Deregistration application within 6 months from the earlier of the following, entity ceases to exist or at the end of the Fiscal Year in which it leaves an MNE Group and is no longer in scope.

3. Can an entity deregister if it has outstanding Top-Up Tax or returns?

No. The Decision clearly states that an entity cannot be deregistered unless it has settled all Top-Up Tax and penalties payable and filed all Top-Up Tax Returns and Pillar Two Information Returns due under the applicable rules.

4. What is an out-of-scope notification for UAE Top-Up Tax?

An out-of-scope notification is required where an entity is a member of an MNE Group and the group ceases to be within the scope for the tested Fiscal Year. The notification generally needs to be submitted within 6 months from the end of the tested Fiscal Year.

5. Can one entity handle Top-Up Tax registration for other group entities?

Yes. A Domestic Designated Filing Entity can be appointed under the applicable UAE Top-Up Tax framework, it can submit relevant application for registration, deregistration and in-scope or out-of-scope notifications on behalf of members of specified domestic group structures.

How Flying Colour Tax Consultant Can Help

The UAE Top-Up Tax regime creates new compliance requirements for multinational groups operating in UAE.

At Flying Colour Tax Consultant, we can assist businesses with:

• UAE Top up tax assessment
• Pillar Two compliance advisory
• Registration support
• In-scope and out-of-scope notification support
• Top-Up Tax deregistration assistance
• MNE group structure review
• Tax compliance calendar management
• Pillar Two documentation and reporting support

Our tax professionals can help your business to understand the UAE Top-Up Tax obligations and establish an appropriate compliance framework.

To learn more about UAE Top-Up Tax Registration: FTA Decision No. 12 of 2026 Explained, book a free consultation with one of the Flyingcolour team advisors.

Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.