Page 10 - ICAI UAE TAX UPDATE_AUGUST 2024

closely aligned with Oman Vision 2040’s goals to Bahrain
empower the private sector, enhance market efficiency,
and expand the capital market. The Kingdom of Bahrain has announced the introduction
of a Domestic Minimum Top-up Tax (DMTT) for
The first pathway offers a substantial incentive package Multinational Enterprises (MNEs), as outlined in Decree
for private companies with a market value exceeding Law No. 11 of 2024. This new tax framework, set to take
10 million Omani Riyals to list on the main market. effect on January 1, 2025, aligns fully with the guidelines
This package is available for a five-year period from of the Organisation for Economic Co-operation and
the decision’s issuance and aims to attract established Development (OECD).
companies to the primary market, facilitating their
growth and capital-raising efforts. To date, over 140 jurisdictions have committed to this
international tax reform. As part of this initiative, the
The second pathway introduces the MSX-AIM (Muscat OECD established a Global Minimum Corporate Tax,
Stock Exchange - Alternative Investment Market), ensuring that large MNEs pay a minimum tax rate of
specifically designed for emerging companies with a 15% on profits in each country where they operate.
market value above 500,000 Omani Riyals. This market
features flexible listing requirements and reduced By introducing the DMTT, Bahrain underscores its
costs, catering to startups, small and medium-sized dedication to international cooperation and creating a
enterprises, and family-owned businesses. The MSX- fairer global tax landscape. The law aims to ensure that
AIM aims to support these high-growth companies in MNEs pay at least a 15% tax on profits generated within
their transition to the main market and is intended for the Kingdom. This legislation applies specifically to
sophisticated investors due to the associated risks. large MNEs operating in Bahrain with global revenues
exceeding the Pillar Two threshold of EUR 750 million.
The third pathway encourages Limited Liability Eligible businesses are required to register with the
Companies (LLCs) to transition to Closed Joint-Stock National Bureau for Revenue (NBR) by the deadline
Companies (SAOCs). This incentive supports a gradual outlined in the relevant legislation.
implementation of governance requirements, preparing
companies for an eventual transition to Public Joint-Stock
Companies (SAOGs). This pathway ensures a robust
legal framework, promoting long-term sustainability
and mitigating internal conflicts.
Overall, the program provides several benefits,
including diversification of funding options through
IPOs, enhanced company credibility via improved
transparency and governance, and expanded investor
bases. Companies will also benefit from increased
visibility and strengthened market positions, which can
attract new investors and support business development.
For more information and guidance on participating in
the program, companies are encouraged to visit the
MSX website or contact relevant authorities.

10 www.icaidubai.org

UAE TAX UPDATE NEWSLETTER ISSUE 05 - August 2024