Corporate tax on the way: Bahrain will impose corporate tax once an international agreement is reached on the framework

Corporate tax on the way: Bahrain will impose corporate tax once an international agreement is reached on the framework

BAHRAIN will impose corporate tax once an international agreement is reached on the framework, according to a top minister.

Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa told MPs, during their weekly session yesterday, that the Organisation for Economic Co-operation and Development (OECD) was currently working on a global corporate taxation structure.

According to the Paris-based organisation, “Tax on corporate profits is defined as taxes levied on the net profits (gross income minus allowable tax relief) of enterprises. It also covers taxes levied on the capital gains of enterprises.”

In October 2021, the OECD said that the international community had agreed on a landmark deal for a two-pillar solution to the tax challenges arising from the digitalisation and globalisation of the economy.

As part of this plan, Pillar Two establishes a global minimum effective corporate tax rate of 15 per cent for large multinational enterprises.

“It is a global direction to impose corporate taxes and Bahrain is committed to comply with the move,” said the minister.

“When the international legislations are crystal clear then a comprehensive local legislation would be formulated and presented to the National Assembly,” he added.

“We firmly believe that companies should contribute to the sustainability of the economy and financial