UAE Issues a Ministerial Decision for the OECD Side-by-Side Tax Package

On June 22, 2026, the UAE issued Ministerial Decision No. 96 of 2026. It formally adopts the latest OECD interpretive materials for the UAE’s QDMTT regime including the 2026 Consolidated Commentary, the 2026 Administrative Guidance/Central Record, and the January 2025 GloBE Information Return. It applies to fiscal years beginning on or after 1 January 2025, repeals Ministerial Decision No. 88 of 2025, and took effect from its date of issuance.

A key consequence of the decision is the incorporation of the OECD’s January 2026 ‘Side-by-Side’ package, in particular the Substance-Based Tax Incentive Safe Harbour and the treatment of Qualified Tax Incentives. This is especially important for the UAE’s new R&D Tax Credit, which applies for tax periods or fiscal years commencing on or after 1 January 2026. The UAE R&D Tax Credit may be capable of fitting within the OECD’s QTI framework in many cases, but the outcome will depend on the statutory conditions, the factual design of the claim, the level of discretion involved, and the Substance Cap.

MD 96/2026 

MD 96/2026 acts as a transposition of the OECD guidance.

Article 1 adopts the Commentary and Agreed Administrative Guidance listed in its annexure “for the purposes” of Cabinet Decision No. 142 of 2024  (which implemented the UAE’s QDMTT).

Article 2 states that the decision applies to fiscal years starting on or after 1 January 2025.

Article 3 repeals MD 88/2025, and Article 4 provides that the decision is published and effective from the date of issuance, 22 June 2026.

The annex to MD 96/2026 identifies three adopted OECD packages: the 2026 Consolidated Commentary to the GloBE Model Rules, the 2026 Administrative Guidance on the GloBE Model Rules/Central Record for the Global Minimum Tax, and the GloBE Information Return, January 2025.

The repeal of MD 88/2025 

MD 96/2026 expressly repeals MD 88/2025. This means that positions previously benchmarked against the earlier adopted OECD material should be refreshed. That is particularly relevant for groups that have already prepared 2025 UAE domestic minimum top-up tax models, accounting provisions, safe harbour analyses, or governance papers.

The effect is that MD 96/2026 updates the adopted interpretive materials for applying the existing UAE top-up tax regime to fiscal years beginning on or after 1 January 2025. 

The OECD Side-by-Side package

The OECD published the January 2026 Side-by-Side package as part of its Pillar Two implementation materials. This includes the Simplified ETR Safe Harbour, a one-year extension of the Transitional CbCR Safe Harbour, the Substance-Based Tax Incentive Safe Harbour, and a broader Side-by-Side System for MNE Groups headquartered in eligible tax regimes.

The 2026 Consolidated Commentary, published by the OECD in May 2026, incorporates Agreed Administrative Guidance released since March 2022 up to May 2026. Because MD 96/2026 adopts that 2026 Consolidated Commentary and the 2026 Administrative Guidance/Central Record, the UAE has effectively updated its Pillar Two interpretive framework to include the Side-by-Side package.

For most UAE taxpayers, the headline item is likely to be the Substance-Based Tax Incentive Safe Harbour rather than the broader Side-by-Side System. The Side-by-Side System leaves QDMTT’s unaffected, while the SBTI Safe Harbour is directed at the treatment of qualifying substance-based tax incentives in the GloBE ETR and top-up tax computation.

MD 96/2026 should also bring the OECD’s Simplified ETR Safe Harbour and the one-year extension of the Transitional CbCR Safe Harbour into the UAE DMTT framework. 

The Simplified ETR Safe Harbour should be available in the UAE from FY2027, and may be relevant from FY2026 where the OECD early-application conditions are satisfied, including where the UAE QDMTT Safe Harbour applies. 

The Substance-Based Tax Incentive Safe Harbour