Bahrain has introduced a Domestic Minimum Top-up Tax (DMTT), effective for financial years starting on or after 1 January 2025, aligning with the OECD's Pillar Two GloBE Model Rules. This significant development impacts large multinational enterprises (MNEs) with annual consolidated revenues of EUR 750 million or more in at last two of the four preceding fiscal years.
The DMTT aims to ensure that the effective tax rate on the income of in-scope MNE groups in Bahrain meets a minimum of 15%. This framework allows Bahrain to retain primary taxing rights over any top-up tax due from entities operating within its jurisdiction.
BDO Bahrain offers comprehensive services to help MNEs understand and comply with the DMTT regulations, including:
- Impact Assessment: Determining whether your MNE group falls within the scope of the DMTT and assessing the potential financial implications.
- Registration and Compliance: Assisting with the mandatory registration with the National Bureau for Revenue (NBR) and navigating ongoing compliance obligations, including annual tax returns and quarterly advance payments.
- Calculation and Optimization: Guiding you through the complex calculations of effective tax rates, understanding substance-based income exclusions, and identifying available safe harbors using BDO proprietary global models.
- Advisory: Providing strategic advice on structuring operations to optimize your tax position under the new regime and mitigate risks.