Latest news with #MNEs
Zawya
12-05-2025
- Business
- Zawya
Law to tax multinational companies is approved in Bahrain
Bahrain - A royal decree law imposing a 15 per cent Domestic Minimum Top-Up Tax on eligible multinational enterprises (MNEs) operating in Bahrain was unanimously approved by the Shura Council yesterday. The decree, originally issued by His Majesty King Hamad in August 2024, had already been approved unanimously by MPs. The landmark legislation brings Bahrain in line with international tax reforms led by the Organisation for Economic Co-operation and Development (OECD), specifically the global minimum tax initiative under the Inclusive Framework on Base Erosion and Profit Shifting (BEPS), to which Bahrain has been a signatory since 2018. Under the new law, a 15pc minimum top-up tax will be levied on MNEs or projects with consolidated annual global revenues exceeding €750 million. The objective is to prevent tax base erosion by ensuring that multinational corporations contribute fairly to the domestic economy, rather than shifting profits to low- or no-tax jurisdictions. According to Shura's financial and economic affairs committee, the measure is part of a suite of urgent reforms to: l Enhance the sustainability of public revenues; l Identify new financial resources to fund rising public expenditure; l Address the national budget deficit; l Support infrastructure and development initiatives; and l Promote economic resilience and social justice. Committee chairman Khalid Al Maskati emphasised the strategic value of the tax. 'This law ensures Bahrain remains an active player in the evolving international tax framework. If we don't impose these taxes, multinationals will pay them elsewhere and Bahrain will lose a crucial revenue stream. 'This tax not only fulfils our international obligations under the OECD framework, but it also allows us to retain revenues from activities conducted within our borders. It is a strategic tool to finance vital infrastructure and services.' The law was issued by royal decree during the parliamentary recess under Article 38 of the Constitution, which permits urgent legislative action in exceptional circumstances. The legislation includes comprehensive provisions detailing the scope of application, mechanisms of tax calculation, administrative and criminal liabilities and dispute resolution procedures. Unlike traditional corporate taxation, the law targets both 'companies' and 'projects', ensuring broader coverage of all legal entities engaged in qualifying activities. This approach guarantees that legal structures cannot be used to avoid the tax. Mr Al Maskati stressed that Bahrain had signed on to Pillar Two of the OECD framework – focused on a global minimum tax on high-revenue MNEs – but not Pillar One, which targets digital services taxation. He also underlined that the law strengthens Bahrain's global investment appeal. 'By adopting this tax, Bahrain is not only meeting its international obligations, but also reinforcing its transparency and legal infrastructure. This positions us as a credible and attractive investment destination.' The government estimates that the new tax will generate BD130 million annually from 348 companies operating in Bahrain, pointed out Mr Al Maskati in a presentation that included statistics. Shura financial and economic affairs committee rapporteur Dr Anwar Al Sadah described the law as a 'cornerstone of fiscal sovereignty and economic modernisation'. 'The introduction of this top-up tax is a critical leap toward securing Bahrain's share of the global tax pie. It ensures that international corporations operating here do not exploit legal gaps to shift profits abroad,' he said. 'We are equipping our economy with the tools to grow independently while meeting global standards. This decree law serves not just as a revenue stream, but also as a declaration of Bahrain's commitment to equitable, rules-based growth. 'With full legislative backing and royal assent, Bahrain's implementation of the Domestic Minimum Top-Up Tax marks a pivotal shift in its fiscal policy landscape. The new framework not only fulfils Bahrain's international obligations but strategically positions the kingdom to capture its rightful share of multinational tax revenue – funds that will now fuel development projects and economic sustainability at home.' Shura legislative and legal affairs committee chairwoman Dalal Al Zayed praised the clarity of the legislative text, noting its legal rigour. 'The government has expertly leveraged international agreements as financial guarantees. The decree contains clear and specific provisions covering all forms of tax evasion, with mechanisms for complaints, appeals and criminal prosecution.' However, she raised a few concerns. 'The decree grants the tax authority a 10-year window starting from the commission of the crime, not from the discovery of it. This wording could weaken the prosecution of tax evasion. Also, some articles refer to financial benchmarks from 2023 despite the law coming into force in 2025 – does this imply retroactive application?' Ms Al Zayed also asked whether tax disputes would fall under the jurisdiction of administrative courts or if a special court circuit would be established. Shura human rights committee chairman Dr Mohammed Al Khozaie framed the law as a vital emergency measure. 'This law comes in the context of urgent steps to ensure revenue sustainability, especially as public spending expands across various sectors. It is key to financing infrastructure while tackling the budget deficit.' Shura Council member Fouad Al Hajji echoed that sentiment. 'This decree law is aligned with government policy agreed upon with Parliament during budget deliberations. It boosts state revenues without burdening citizens with new taxes or fees. It has both a financial and social dimension, as it channels corporate tax revenues into development projects that benefit the people.' Shura first vice-chairman Jamal Fakhro called for greater clarity on the figures. 'We need to know how many Bahraini and foreign companies will fall under this law. Will there be exemptions? There's a discrepancy in the projected revenues – BD100m cited by Parliament and BD130m by the Shura. These differences matter for future oversight.' National Bureau for Revenue chief executive Rana Faqih was present during the debate on the issue at the chamber's weekly session. Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Zawya
08-05-2025
- Business
- Zawya
Bahrain: Green light for new corporate tax
Bahrain - Parliament yesterday unanimously approved a new tax on multinational enterprises (MNEs). MPs held a retrospective vote on a royal decree issued by His Majesty King Hamad on the Domestic Minimum Top-up Tax for MNEs Law, during the National Assembly recess last year. Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa said 348 multinational companies operating in Bahrain would fall within the scope of the new law, with projected annual tax revenues of approximately BD130 million. He added that the tax would prevent revenue loss and enhance Bahrain's economic environment by fostering stability and transparency. Shaikh Salman emphasised the government's dedication to fiscal sustainability and said the tax would also reinforce the country's attractiveness as a destination for responsible foreign investment. The minister's response followed a parliamentary enquiry from first deputy speaker Abdulnabi Salman regarding the anticipated impact of the tax on multinational projects operating in the kingdom. The minister highlighted Bahrain's participation in the Organisation for Economic Co-operation and Development (OECD) Inclusive Framework since 2018, alongside more than 140 countries, including GCC members. 'This initiative is part of global efforts to combat base erosion and profit shifting (BEPS), ensuring that profits are taxed where economic activities generating them take place,' he explained. 'By adopting the OECD's Pillar Two Model Rules, we are taking a proactive step to uphold international tax fairness, prevent revenue leakage and maintain Bahrain's reputation as a transparent and co-operative jurisdiction,' Shaikh Salman noted. Pillar Two establishes a global minimum corporate tax rate of 15 per cent for large multinational companies, applicable to firms operating in multiple countries and earning at least 750 million euros in revenues in at least two of the past four years. 'Implementing this tax prevents other countries from claiming taxes on profits generated in Bahrain,' Shaikh Salman said. Journalists were yesterday honoured at Parliament during a celebration to mark the Bahrain Press Day, which falls today, and the World Press Freedom Day, which was marked on Saturday. Celebrations were organised by MP Hamad Al Doy in the presence of Social Development Minister Osama Al Alawi and Parliament's financial and economic affairs committee chairman MP Ahmed Al Salloom. Earlier during the session, Parliament Speaker Ahmed Al Musallam read out a statement on both occasions. GDN Chief Reporter Mohammed Al A'ali was honoured for long time coverage of legislative work since its introduction in 2002. Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Zawya
29-04-2025
- Business
- Zawya
Shaikha Al-Bahar: Continuing excellence and driving innovation are key pillars of NBK's success
The government's efforts to expand the role of the private sector are set to stimulate economic activity and support the banking sector Locally, the bank remains focused on advancing digital services, diversifying its customer base, and enhancing their banking experience NBK seeks to strengthen its presence in key markets, improve operational efficiency, and pursue sustainable financing opportunities Excluding the impact of the new tax, NBK's profits in the first quarter of 2025 recorded 1% year-on-year growth The impact of the new tax regime on the Group's financial statements is transitional, with the annual effect expected to fade after 2025 We continue to focus on fee income to diversify revenue sources and reduce the impact of interest rate fluctuations Global trade war and new US tariffs heighten uncertainty surrounding future economic prospects NBK maintains an optimistic outlook for Kuwait, supported by emerging opportunities and government progress on strategic and legislative fronts We expect the operating environment to continue improving locally, with strong infrastructure spending and economic reforms In an interview with CNBC International, Ms. Shaikha Al-Bahar, Deputy Group Chief Executive Officer of National Bank of Kuwait (NBK) affirmed the Group's commitment to maintaining excellence and fostering innovation as key pillars of its success, while emphasizing the continued use of technology and data-driven strategies to seize emerging opportunities across NBK's growth markets. Al-Bahar noted that, in Kuwait, the bank remains focused on developing digital services, diversifying its customer base, and enhancing the banking experience. Internationally, NBK is working to strengthen its presence in key markets, improve operational efficiency, explore sustainable financing opportunities, and expand cross-selling activities. She further highlighted that NBK Group is reinforcing its regional leadership through NBK Wealth, focusing on the enhancement of its financial advisory and investment services. First Quarter Financial Results Commenting on NBK's financial results for the first quarter of 2025, Al-Bahar said: 'We delivered solid profit growth in the first quarter of 2025, despite the impact of the newly implemented domestic minimum top-up tax ("DMTT") of 15% on the profits of Kuwaiti constituent entities of large Multinational Enterprises ("MNEs"). This tax, rolled out in different markets in which we operate in, raised the effective tax rate to 16.3% in the first quarter of 2025, compared to 9.2% in 2024'. She explained that this led to a drop in net profits by 8.5% year-on-year, adding that excluding the impact of the new tax regime, NBK achieved a growth rate close to 1% in pre-tax profits during the first three months of 2025, supported by robust growth in lending and investment activities, in line with the bank's diversification strategy. 'The implementation of the DMTT tax system was not surprising, given that the related laws were introduced globally two years ago. We had anticipated their actual enforcement in 2025 across most of our regional markets,' Al-Bahar said. She added that while this new tax structure will have a transitional impact on the bank's quarterly financials during 2025, its impact will fade beyond this year. Al-Bahar underscored the strength of NBK's financial position, backed by a solid balance sheet, strong capitalization, high liquidity levels, robust asset quality, and a prudent approach to risk management Our NPL/gross loan ratio stood at 1.3%, while the NPL coverage ratio reached 251%. She underscored that the strong growth in non-interest income, which rose by 4.3%, helped offset the pressure on net interest income caused by lower interest rates and a shift in the asset mix. Al-Bahar added that the asset mix is expected to improve with the deployment of excess liquidity into anticipated government issuances, likely to materialize soon under the new financing and liquidity law that the market has long awaited. She emphasized that this move would enhance profit margins, as the bank continues to prioritize fee income to diversify its revenue streams and mitigate exposure to interest rate volatility. Trade War On the impact of the global trade war and geopolitical tensions in the MENA region, Al-Bahar stressed that the global economic environment remains highly volatile. She explained that, along with persistent geopolitical tensions and growing uncertainty surrounding monetary policies, the recent US tariffs have further clouded future economic prospects. Al-Bahar noted that while the region remains relatively protected due to the exemption of oil and gas exports from tariffs, the GCC economies are more vulnerable to oil price fluctuations. She added that oil price volatility is likely to persist in the short term as global economic growth projections continue to be revised downward, which in turn impacts oil demand. 'As for Kuwait, despite geopolitical tensions and the looming threat of a trade war weighing on growth prospects, we remain confident that the operating environment and overall economic performance will continue to improve, supported by sustained momentum in infrastructure spending and ongoing economic and legislative reforms.' Al-Bahar added. Commenting on NBK's exposure to risks from a potential decline in oil prices, Al-Bahar acknowledged that the level of uncertainty that prevails today, it is challenging to take a solid view of economic activity going forward, even in the region. She noted that under a scenario of reduced oil price volatility, regional GDP growth could recover, supported by steady increases in oil production, which would boost economic performance across the GCC. Optimistic Outlook Al-Bahar expressed an optimistic outlook for Kuwait, fueled by emerging opportunities and the ongoing progress of the government's strategic and legislative agenda. She highlighted that economic diversification remains a central focus, with increased support for the private sector and its active participation in driving economic growth, which will positively impact the banking sector. She conveyed her strong expectations and optimism about the country's continued positive trajectory. On the potential effects of this environment on credit demand, Al-Bahar highlighted the anticipated launch of a series of mega projects. She shared her confidence in the continued momentum of project awards, noting that this would create significant opportunities for banks and revive credit activity. In the first quarter, contract awards reached $1.3 billion, with planned awards amounting to $33 billion, representing a substantial opportunity for banks to outperform last year. Additionally, Al-Bahar pointed to the upcoming mortgage law, which is expected to facilitate home loans for customers, offering further avenues for lending. She noted that banks have strong liquidity that they hope to invest in the upcoming government issuance, particularly in alignment with the Finance and Liquidity Law. 'We are extremely optimistic and confident that the business environment will show significant improvement compared to previous years. With the IMF forecasting a 4.2% growth for the GCC economy, this presents a tremendous opportunity for all banks,' Al-Bahar explained.
Hi Dubai
16-04-2025
- Business
- Hi Dubai
UAE Adopts Full OECD Guidance on GloBE Rules in Latest Taxation Move
The UAE Ministry of Finance has issued Ministerial Decision No. (88) of 2025, officially adopting all guidance published by the Organisation for Economic Co-operation and Development (OECD) on Global Anti-Base Erosion (GloBE) Rules under Pillar Two. This move comes on the heels of Cabinet Decision No. (142) of 2024, which introduced a Top-up Tax targeting Multinational Enterprises (MNEs). Together, the decisions mark a significant step in aligning the UAE's tax framework with international standards. By incorporating all OECD Administrative Guidance and commentary up to January 2025, the UAE reinforces its commitment to the OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS), of which it is an active member. The Ministry emphasised that this alignment will ensure consistency in the UAE's Domestic Minimum Top-up Tax (DMTT) regime while streamlining compliance for affected MNEs. The adoption of the OECD's comprehensive guidance aims to support transparency, reduce tax avoidance risks, and enhance the UAE's global competitiveness through the application of clear, consistent, and internationally recognised tax rules. News Source: Emirates News Agency
Yahoo
04-04-2025
- Business
- Yahoo
RSM's FY2025 Global Tax conference focuses on key tax issues
RSM, a provider of assurance, tax and consulting services, hosted its Global Tax Conference for FY2025 in Amsterdam, Netherlands. The event brought together tax experts from 49 countries to discuss critical international tax developments shaping the business landscape, the company said. The conference followed a 'strong' year for RSM's global tax practice, which saw an 11% rise in annual tax revenues. The three-day event provided a platform for RSM's global tax specialists to delve into technical areas including mergers and acquisitions, transfer pricing, and global indirect tax, through a series of specialist breakout sessions. RSM International CEO E.J. Nedder said: 'The Global Tax Conference is a powerful opportunity for RSM to unite our global community and leverage our brand, expertise and vision. This enables us to continually strengthen our ability to deliver consistent, high-quality experiences for both our people and our clients. 'This conference is a celebration of collaboration, where innovation drives progress and enhances the value we create. 'One RSM' is more than just a theme – it reflects our commitment to shared success and our unwavering dedication to working together as one.' Delegates at the conference also received forward-looking insights into the tax developments expected to shape the landscape in 2025, RSM said. The three-day event, held under the theme 'One RSM,' explored the issues currently influencing global tax policy. This covered the OECD's Pillar 2 framework, including the STTR adoption by developing countries, and the need for businesses to manage rising compliance and tax liabilities in a changing global tax environment. Commenting on the complexities behind Pillar 2's implementation, RSM Netherlands director Juan Dosal said: 'As countries adopt varying interpretations and timelines for Pillar 2, multinational enterprises (MNEs) face significant compliance complexities, increased audit scrutiny, and the risk of double taxation. 'Some jurisdictions may delay implementation or introduce deviations from the OECD framework, creating a patchwork of rules that escalates operational costs and complicates tax planning. 'To navigate this, MNEs are centralising their Pillar 2 compliance strategies, leveraging advanced technology for real-time reporting, and proactively engaging with tax authorities to resolve ambiguities. 'While divergence in national policies raises concerns about short-term tax competition, there is growing evidence of a shift toward long-term global alignment. "Initiatives like the EU's Directive on Administrative Cooperation (DAC9)—which introduces standardised reporting and central filing for MNEs by December 2025—are enhancing data-sharing and reducing administrative burdens.' "RSM's FY2025 Global Tax conference focuses on key tax issues" was originally created and published by The Accountant, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
