Navigating GCC Tax Changes: A Guide for Entrepreneurs
The Gulf Cooperation Council (GCC) region is stepping into a new fiscal era! As governments across Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE implement new tax frameworks, entrepreneurs must adapt quickly to stay compliant and competitive.
In this blog, we will explore recent tax updates across the GCC in 2025 along with practical insights to help business owners navigate these changes with confidence!
Why Are GCC Tax Reforms Happening?
Governments in the Gulf Cooperation Council (GCC) region are implementing these reforms to achieve two primary objectives:
Economic Diversification – Lowering dependence on oil revenues by broadening the tax base.
Global Compliance – Aligning with OECD standards and international tax procedures.
Overall, the latest GCC tax updates aim to promote long-term fiscal stability. For entrepreneurs, it’s a signal to adapt their tax optimisation strategies.
5 Key GCC Tax Changes in 2025
1. Corporate Income Tax (CIT) Expands Across the Region
Several GCC nations are rolling out or refining corporate tax structures:
Bahrain: Introducing CIT as part of an 8-point fiscal stability strategy, included in the 2025–26 budget
Kuwait: Implementing a 15% corporate tax on profits starting in 2025. This applies to all local and foreign-owned businesses.
UAE & Saudi Arabia: The UAE has a 9% CIT effective from 2023, while Saudi Arabia still has a 20% tax on net adjusted profits. Now, both countries are adopting OECD tax frameworks.
2. Domestic Minimum Top-Up Tax (DMTT) for Multinationals
Aligned with OECD Pillar Two, DMTT ensures big multinational groups pay a minimum tax. It applies to MNEs with consolidated earnings of at least €750 million in two of the last four years.
Bahrain is currently processing applications for the DMTT. Meanwhile, Qatar and the UAE are planning to put in place similar measures starting in 2025.
3. VAT & Excise Tax Adjustments
While VAT rates remain stable in most countries, their scope is expanding. Here’s a quick breakdown:
- Bahrain maintains 10% VAT but introduces new excise and carbon taxes.
- Saudi Arabia continues with a 15% VAT rate.
- UAE retains its 5% VAT but is improving its enforcement.
4. Stricter Transfer Pricing & Transparency Rules
Transfer pricing (TP) documentation is compulsory for businesses engaged in cross-border transactions. In Saudi Arabia, firms must follow TP documentation requirements. This includes Country-by-Country Reporting (CbCR) and the preparation of Master and Local Files.
In 2023, the UAE introduced transfer pricing regulations to enforce the Arm’s Length Principle (ALP), aligning its tax framework with global standards.
Soon after, Qatar and Oman followed suit by rolling out their own transfer pricing guidelines. These developments mark a significant step toward greater transparency in cross-border transactions and enhanced tax compliance across the region.
5. Digital Tax Administration Takes Centre Stage
GCC governments are speeding up digital tax compliance efforts. Recently, Saudi Arabia has launched the e-invoicing Phase 2 through Fatoora. Besides, the UAE is improving real-time tax reporting and e-invoicing integration.
Strategic Guidance for Entrepreneurs
Here are key steps to help you navigate these changes:
Conduct a Tax Impact Assessment
Check how the upcoming CIT and DMTT rules will affect your bottom line. This includes understanding your obligations under OECD-aligned frameworks. Also, assess the financial impact of new excise or carbon taxes.
Integrate Tax into Business Strategy
Don’t treat taxes as an afterthought. Your tax strategy should align with operational goals and local regulations. For instance, petroleum companies in KSA face sector-specific rules that need tailored planning.
Work With Tax Experts
Navigating cross-border tax compliance and incentives is complex. Specialised advisors can help minimise liabilities, optimise tax strategies. This ensures smooth registration with local authorities.
Schedule Regular Tax Health Checks
Regular reviews help you to stay updated with legal changes. You can seek out new exemptions or incentives, which is especially beneficial for businesses in Free Zones or Special Economic Zones.
Keep an Eye on Deadlines
Missing registration or filing deadlines for DMTT or CbCR can result in penalties. Create a tax calendar to stay on track.
How 10xM Can Help You Master GCC Tax Reforms and Drive Business Success
The changing tax environment in the GCC doesn’t have to slow you down. With 10xM, we simplify the complexities of corporate tax laws, transfer pricing, and digital compliance for you!
Our team offers end-to-end support from impact assessments to regulatory compliance. Book a free consultation today and future-proof your business in the GCC!
