Kuwait
British ministers head to Gulf for talks on new trade deal
Britain's new trade ministers visited the Gulf region on Monday in a first joint visit for talks on a possible trade deal, the government said.
Bahrain has announced the introduction of a tax on multinational corporations' profits beginning in 2025, marking a first for the Gulf kingdom.
Bahrain's move reflects a broader shift in the Gulf region towards aligning with international tax standards © Mena Today
Bahrain has announced the introduction of a tax on multinational corporations' profits beginning in 2025, marking a first for the Gulf kingdom.
The measure, set to take effect on January 1, aims to ensure that multinational companies pay a minimum tax rate of 15% on profits generated within the country, in line with the standards set by the Organisation for Economic Co-operation and Development (OECD), according to Bahrain's national news agency (BNA) on Sunday evening.
This tax will apply to all companies with global revenues exceeding 750 million euros, reflecting "Bahrain's commitment to promoting global economic fairness and transparency," the agency added.
In 2021, more than 130 countries agreed to implement a global minimum corporate tax rate of 15%, under the auspices of the OECD, to curb tax avoidance practices by major corporations seeking low-tax jurisdictions.
A small oil producer not affiliated with the Organisation of the Petroleum Exporting Countries (OPEC), Bahrain, like other Gulf nations, is striving to diversify its revenue sources, which are heavily dependent on oil.
The move follows similar steps by other Gulf states; for instance, the United Arab Emirates, long regarded as a tax haven and the regional base for numerous companies, began taxing corporate profits exceeding 375,000 dirhams (around 91,500 euros) at 9% last year. Oman and Kuwait already impose a 15% tax on foreign companies.
"The case of Bahrain is notable because the country previously had no corporate income tax and is now directly implementing OECD standards," said Justin Alexander, director of Khalij Economics, a consultancy firm.
Manama, home to operations of multinational companies like Amazon Web Services, Microsoft, and Pepsi, had previously resisted such a tax due to concerns about competitiveness, the economist recalled. However, persistent budget deficits and the trend towards tax harmonization in the region have encouraged Bahrain to adopt this approach, he explained.
According to the OECD, the introduction of a global minimum corporate tax rate is expected to generate an additional $220 billion (approximately 199 billion euros) in annual revenue for governments worldwide.
Bahrain's move reflects a broader shift in the Gulf region towards aligning with international tax standards, driven by economic challenges and the need for new revenue sources. This decision also underscores the kingdom's strategic recalibration in response to both regional economic integration and global tax reform efforts.
Britain's new trade ministers visited the Gulf region on Monday in a first joint visit for talks on a possible trade deal, the government said.
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