GTL Summary:

Article 10 prescribes the currency rules for Top-up Tax calculations. Calculations based on standalone financial statements use the local functional currency, while those based on consolidated accounts use the UPE’s presentation currency. The article provides rules for currency conversion using European Central Bank or UAE Central Bank rates. Importantly, while calculations may be performed in foreign currencies, the final Top-up Tax liability must be converted and reported in UAE Dirhams (AED) for the final return, ensuring consistency in the Federal Tax Authority's collection and reporting systems.

Document Type: CD - Cabinet Decision
Law: DMTT (FDL No 60 of 2023)
Decision Number: cabinet-decision-142-article-10
Year: 2024
Country: 🇦🇪 UAE
Official Name: Article 10 - Currency
Last updated at: 2026-03-23 15:38:06 UTC

Article 10 - Currency

10.1 Where the calculations of the Top-up Tax are based on the standalone financial statements pursuant to Article 3.1.2, all calculations shall be made using the functional currency of the standalone financial statements.

10.2Article 10.1 does not apply where two or more standalone financial statements of the Constituent Entities of Domestic Group are using different functional currencies. In this case, the Filing Constituent Entity shall make a Five-Year Election to use the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity or UAE Dirhams for purposes of the Top-up Tax calculation.

10.3 If an amount that is relevant to the calculations required under Article 10.1 is denominated in a currency other than the functional currency of the standalone financial statements and is not converted to the functional currency in the course of preparing the standalone financial statements, that amount is to be converted to the functional currency using the foreign currency translation principles of the financial accounting standard that would have been used to convert the amount to the functional currency if that conversion were undertaken in the course of preparing the standalone financial statements.

10.4 Where the calculations of the Top-up Tax are based on the accounts used for preparing Consolidated Financial Statements of the Ultimate Parent Entity in accordance with Article 3.1.3, all calculations shall be made using the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group.

10.5 For purposes of Article 10.4, if an amount that is relevant to the calculations required under this Decision is denominated in a currency other than the presentation currency of the Consolidated Financial Statements and is not converted to the presentation currency in the course of preparing the Consolidated Financial Statements, that amount is to be converted to the presentation currency using the foreign currency translation principles of the financial accounting standard that would have been used to convert the amount to the presentation currency if that conversion were undertaken in the course of preparing the Consolidated Financial Statements.

10.6 For purposes of determining whether a threshold in this Decision is met, the relevant amounts expressed in a currency other than the EUR have to be converted into EUR using the average of the daily reference rates of the month of December prior to the commencement of the relevant Fiscal Year, as quoted by:

(a) the European Central Bank;

(b) where the European Central Bank does not provide a foreign exchange reference rate for the local currency of a Jurisdiction, the average foreign exchange rate will be determined by that quoted by the Central Bank of the UAE; or

(c) if neither the European Central Bank nor the Central Bank of the UAE quotes a daily rate of exchange in respect of the two currencies, the foreign exchange rate shall be determined by another source acceptable to the Federal Tax Authority.

10.7 For purposes of Article 3.2.1(f), the adjustments for Asymmetric Foreign Currency Gains or Losses shall be determined by reference to the Constituent Entity´s tax functional currency and accounting functional currency and the resulting amount of the required adjustment shall be converted to the functional currency of the standalone financial statements in the case of Article 3.1.2 or to the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group in the case of Article 3.1.3 or 3.1.5.

10.8 For purposes of Article 15, the Pillar Two Information Return shall be filled using the presentation currency of the Consolidated Financial Statements of the Ultimate Parent Entity of the MNE Group.

10.9 For purposes of Article 8.1, the Top-up Tax Return shall be filed in the currency used for the calculations of the Top-up Tax. The Top-up Tax due has to be converted into UAE Dirhams using the average of the daily reference rates of the month of December prior to the commencement of the relevant Fiscal Year in accordance with the same procedure in Article 15.6.

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