Bahrain will introduce a 15% tax on profits generated by multinational corporations operating within its borders, starting January 1, 2024. This new Domestic Minimum Top-Up Tax (DMTT) is part of Bahrain’s alignment with global tax reforms led by the Organisation for Economic Co-operation and Development (OECD).
The tax will apply to large multinational companies with global revenues exceeding €750 million ($830 million) for at least two of the previous four fiscal years. These companies will need to register with Bahrain’s National Bureau for Revenue, which also oversees VAT and excise tax collection.
This move aligns with the OECD’s global minimum corporate tax initiative, designed to ensure large multinational enterprises pay a minimum of 15% tax on profits in every country they operate. The OECD’s reform aims to address tax challenges posed by the digitalisation and globalisation of economies and to curb tax competition between nations.
Bahrain’s adoption of the DMTT reflects its commitment to global cooperation and efforts to create a fair international taxation environment. As the smallest economy in the Gulf Cooperation Council (GCC), Bahrain is working to diversify its economy away from oil dependence, with significant investments in non-hydrocarbon sectors.
This tax reform follows Bahrain’s broader economic strategy, which includes a $30 billion investment plan launched in 2021 to drive post-pandemic growth, increase employment, and attract foreign direct investment. The International Monetary Fund projects Bahrain’s real GDP will grow by 3.6% in 2024.
