Bahrain implements 15% minimum corporate tax on large multinationals

2nd September 2024 – (Manama)  Bahrain has declared the introduction of a new domestic minimum top-up tax of 15 per cent for major multinational companies, set to take effect from 1st January next year, as reported by the Bahrain News Agency. This strategic fiscal policy aligns with the Organization for Economic Co-operation and Development (OECD) guidelines and aims to bolster the kingdom’s tax framework.

The tax measure will target multinational enterprises boasting global revenues exceeding 750 million euros ($829 million), ensuring they contribute a minimum of 15 per cent tax on profits generated within Bahrain. This decision underscores Bahrain’s ongoing commitment to global tax reform initiatives and its cooperation with the OECD, which began in earnest in 2018 when it joined the inclusive framework on Base Erosion and Profit Shifting (BEPS).

Bahrain’s alignment with the OECD’s two-pillar solution to tax challenges arising from the digitalisation of the economy marks a significant step in ensuring fair taxation practices across borders. The first pillar addresses the allocation of taxing rights and profits to countries where economic activities occur and value is created, while the second pillar, which includes the newly announced 15 per cent minimum tax, aims to stop the erosion of tax bases and profit shifting to low-tax jurisdictions.