Domestic Minimum Top-Up Tax (DMTT)
Domestic Minimum Top-Up Tax (DMTT) is a tax mechanism designed to ensure that large multinational companies pay a minimum level of tax within the country where they operate. Introduced as part of global tax reforms under the OECD’s Pillar Two framework, DMTT prevents profit shifting to low-tax jurisdictions by applying a top-up tax if a company’s effective tax rate falls below the required minimum. This system promotes tax fairness, strengthens compliance, and protects national revenue. For businesses, understanding DMTT is essential to maintain transparency, avoid penalties, and align with international tax standards.
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