Navigating GCC Tax Changes: A Guide for Entrepreneurs

The Gulf Cooperation Council (GCC) region enters a new fiscal era! Tax reforms are now reshaping how entrepreneurs operate and plan for growth. Business owners in Bahrain, Kuwait, Qatar, KSA, and the UAE must stay informed about the new tax rules.

In today's blog, we will explore recent tax updates across the GCC in 2025. We'll also look at practical tips for entrepreneurs to navigate these changes!

Why Are GCC Tax Reforms Happening?

Governments in the 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 be compliant and adapt their business 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 also 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 launched transfer pricing regulations. It was to implement the ALP (arm's length principle). Qatar and Oman followed suit by implementing TP guidelines aligned with international standards. This promotes transparency in cross-border transactions and strengthens 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:

1. 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.

2. 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 require tailored planning.

3. Work With Tax Experts

Navigating cross-border tax compliance and incentives is complex. Specialised tax advisors can help minimise liabilities, optimise tax positions. This ensures smooth registration with local authorities.

4. Schedule Regular Tax Health Checks

Frequent reviews help you adapt to legal updates. You can try to discover new exemptions or incentives. This is particularly useful for businesses in Free Zones or Special Economic Zones.

5. Keep an Eye on Deadlines

Missing registration or filing deadlines for DMTT or Country-by-Country Reporting (CbCR) can result in penalties. Establish a tax calendar and assign internal responsibility 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!