When will corporate tax be introduced in Bahrain?
Bahrain will introduce a corporate tax as soon as an international agreement on the GMT framework is reached.
Minister of Finance and National Economy Sheikh Salman bin Khalifa Al Khalifa informed members of Parliament during the weekly session that the Organization for Economic Cooperation and Development (OECD) is currently working on a global corporate tax structure.
According to the OECD, “corporate income tax is defined as taxes levied on the net profit (gross income minus allowable tax benefits) of enterprises. It also covers taxes levied on the capital gains of enterprises.”
In October 2021, the OECD announced that the international community had agreed on a landmark agreement on a two-component solution to tax problems arising from the digitalization and globalization of the economy.
Under this plan, “Component 2” sets a global minimum effective corporate tax rate of 15% for large multinational enterprises.
Shaikh Salman said that the delay in the introduction of corporate tax was due to the delay in the contribution of international organizations and companies.
The Minister added that “the contribution of the non-oil sector to the economy exceeded 83%, which indicates an increase in employment in the private sector. Most Bahraini workers are employed in the private sector and we have to take care of their welfare.”
The Minister and other senior government officials attended the meeting to answer numerous questions and provide answers to proposals considered by the Cabinet of Ministers concerning corporate tax, resumption of suspended flights, production of video and audio products and markets.
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