business bites Bahrainthismonth.com October 2024 51 DOMESTIC MINIMUM TOP-UP TAX (DMTT) TO BE IMPLEMENTED FROM JANUARY 1 BAHRAIN’S MENAMONEY SIGN MOU WITH UAE AND GULF INSURANCE FEDERATIONS BAHRAIN AND HUNGARY’S BUSINESS BOOST A specialist with over 25 years of experience in Tax & Legal services at PwC Middle East, Richard Bregonje, has stated that the Kingdom of Bahrain’s decision to implement a Domestic Minimum Top-up Tax (DMTT) at a rate of 15 percent on profits earned by Bahraini members of MNE groups sets a pioneering precedent within the GCC region, potentially serving as a model for neighbouring countries. “This tax will not impact domestic Bahraini companies that are not part of Multinational Enterprises (MNE) groups, and the revenues generated could be utilised to improve public services, advance infrastructure development, and support major projects,” explains Mr. Bregonje. “Bahrain’s decision to impose DMTT is a crucial step in the right direction, aligning with the government’s policies and the economic recovery plans outlined in Bahrain’s Economic Vision 2030. The decision also represents an important shift towards reducing reliance on oil revenues, supporting economic stability and financial balance, especially given the volatility in today’s global oil market,” he adds. PwC Middle East Senior Associate – Tax & Legal services, Fatima Alshamaa, describes the implementation of DMTT as a significant milestone in Bahrain’s tax landscape for multinational enterprises. The tax is applicable exclusively to Bahraini entities that form part of MNE groups with annual revenues of EUR750 million or more as per the consolidated financial statements of the ultimate parent entity of the MNE. The DMTT does not apply to local Bahraini groups which do not have entities or establishments outside of the Kingdom. Ms. Alshamaa adds: “Scheduled to take effect on January 1, 2025, this legislation provides multinational companies with a preparatory period to assess its impact on their operations. Companies are advised to undertake thorough evaluations and seek specialised professional consultations to ensure full compliance with the forthcoming requirements.” The Emirates Insurance Federation (EIF) and Gulf Insurance Federation (GIF) have both recently signed an MoU with the Bahrain-based MenaMoney Forums (formerly known as Fintech Robos). According to the MoU, the Arab Actuarial Conference 2026 will be held in Dubai, the United Arab Emirates in liaison with and under the patronage of UAE’s financial regulators. The MoU was authorised by EIF and GIF Secretary General, Farid Lutfi, and MenaMoney CEO, Ebrahim K Ebrahim. The Arab Actuarial Conference is a regional professional platform for actuaries, actuarial firms and businesses and industries that depend on actuarial work such as insurance, finance, banking, healthcare, pension funds, asset management and risk management. Held in a different Arab capital every year, the highly attended event tackles emerging issues and future themes affecting actuarial work and financial industries. MenaMoney Forums is a Bahrain-based firm specialised in financial conferences while EIF is a non-profit organisation that supports the development of insurance, reinsurance and insurance brokerage sectors in UAE. GIF is a non-profit institution that coordinates collaboration among insurance companies and federations in GCC markets. Relations between Bahrain and Hungary have reached a new high after Fareed Bader, Chairman of the Industry and Energy Committee at the Bahrain Chamber of Commerce and Industry, recently met with the Bahrain & Hungary Relations organisation to strengthen ties between Bahrain and Hungary. The discussion centred on joint cooperation in industrial innovation, particularly in energy conservation and carbon emission reduction. Tamas Hovany, CEO of Bahrain & Hungary Relations, highlighted the organisation’s commitment to fostering economic collaboration and investment exchanges between the two nations. This aligns with the recently signed ‘Protection of Investments’ agreement, which aims to enhance bilateral investment protection. A key focus of the collaboration is introducing advanced Hungarian technologies, such as a highly efficient steam generator designed to reduce energy consumption and environmental impact. Mr. Hovany emphasised the potential of this innovation to boost Bahrain’s industrial productivity and contribute to the Kingdom’s economic growth, with the possibility of registering the invention as a Bahraini patent. This would secure intellectual property rights and create new opportunities for local and international partnerships.
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