Bahrain to impose new tax on multinational companies in early 2025

The government of Bahrain will impose a new tax on large multinational companies operating in the kingdom as of January next year, Bahrain News Agency has reported.

The domestic minimum top-up tax (DMTT) will impose a minimum 15 per cent tax on profits generated by large multinationals operating in the country, specifically those with global revenues exceeding $830 million in at least two of the past four fiscal years.

In a statement issued on Sunday, the National Revenue Bureau explained that the application of the tax is in accordance with Decree-Law No. (11) of 2024, and in compliance with the Organisation for Economic Co-operation and Development (OECD). “The decree will come into force on 1 January, 2025, and those eligible must register with the Bureau before the deadline specified in the relevant legislation,” added the bureau.

It said that the step is in line with the Kingdom of Bahrain’s accession in 2018 to the comprehensive framework of the OECD in support of the two-pillar tax reform project alongside more than 140 countries, including other GCC countries.

“With the application of the tax on multinational companies, the Kingdom of Bahrain confirms its commitment to international tax standards and its participation in securing fair and equal opportunities for companies in this field, where companies covered by the law will pay a tax rate of no less than 15 per cent of the profits achieved in the Kingdom of Bahrain,” the bureau pointed out.

The OECD imposes a minimum tax of 15 per cent on large multinational companies to prevent tax evasion and discourage moves to countries with lower tax rates.

Bahrain signed the Abraham Accords in a “Declaration of Peace, Cooperation and Constructive Diplomatic and Friendly Relations” with the occupation state of Israel on 15 September 2020.

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