The Kingdom of Bahrain has announced the implementation of a Domestic Minimum Top-up Tax (DMTT) for Multinational Enterprises (MNEs), as specified in Decree Law (11) of 2024.
According to the Bahrain News Agency (BNA), this new framework for MNEs is fully in line with the guidelines set by the Organisation for Economic Co-operation and Development (OECD) and will take effect on January 1, 2025. This initiative highlights Bahrain’s commitment to enhancing global economic fairness and transparency.
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This strategic action builds upon Bahrain’s proactive collaboration with the OECD, which began in 2018 when it joined the Inclusive Framework and supported the innovative two-pillar reform. As of now, more than 140 jurisdictions have endorsed this international tax reform. The OECD’s two-pillar approach includes the establishment of a Global Minimum Corporate Tax, ensuring that large MNEs are required to pay a minimum tax rate of 15% on profits in every country where they operate.
By introducing the DMTT, Bahrain reaffirms its commitment to international cooperation and its goal of creating a fair and equitable environment in global taxation. The implementation of this measure aims to guarantee that MNEs contribute at least 15% tax on the profits earned within the Kingdom.
This Decree Law will be applicable solely to large MNEs operating in Bahrain, with global revenues exceeding the Pillar Two threshold of EUR 750 million. Eligible entities are encouraged to register with the National Bureau for Revenue (NBR) before the deadline outlined in the relevant legislation.
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