Tax
From The Report: Bahrain 2024
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Bahrain’s tax landscape has evolved in recent years, with the introduction of excise tax in 2017 and value-added tax in 2019. Since then, new regulations have been aimed at improving financial oversight. Notably, a domestic minimum top-up tax law is set to be implemented in 2025, impacting Bahraini entities that are part of large multinational enterprise groups. As a financial leader in the Middle East, Bahrain has focused on economic diversification, promoting sectors including technology, manufacturing and logistics. The kingdom encourages international investment by allowing 100% foreign ownership in various sectors. These initiatives demonstrate Bahrain’s proactive approach to evolving its tax framework and enhancing its position as a competitive business destination.

This chapter includes a viewpoint from Mubeen Khadir, Head of Tax and Corporate Services, KPMG Fakhro.

Articles from this Chapter

Overview

Evolving requirements: Tax landscape continues to mature, with a domestic minimum top-up tax for large multinational enterprises starting in 2025
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Bahrain remained a tax-free jurisdiction until 2017, when the kingdom introduced excise tax – followed by the implementation of value-added tax (VAT) two years later. The country’s tax landscape continues to evolve, with a number of other notable tax and reporting regulations launched in recent years. Among these, a domestic minimum top-up tax (DMTT) law will take effect for Bahrain entities that are part of large multinational enterprise groups starting in 2025. Regarded as a financial leader…

Viewpoint

A new chapter: Mubeen Khadir, Head of Tax and Corporate Services, KPMG Fakhro, on the implementation of new regulations
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On September 1, 2024 Bahrain became the first GCC country to implement a domestic minimum top-up tax (DMTT) aligned with pillar two of the OECD base erosion profit shifting inclusive framework. The DMTT law applies the global minimum tax of 15% on Bahraini constituent entities of multinational enterprises (MNEs) and contains key operative provisions of pillar two of the OECD global anti-base erosion model regulations. While the DMTT only applies to Bahraini constituent entities of large MNEs having…