The Global Anti-Base Erosion (GloBE) rules, commonly referred to as Pillar 2, introduce a global minimum effective tax rate of 15% for large multinational enterprises. For groups operating across the Gulf Cooperation Council (GCC), the rules mark one of the most significant shifts in regional tax policy in decades.
This article sets out where each GCC jurisdiction currently stands, the practical steps groups should be taking now, and the data and systems challenges that typically arise during the first reporting cycle.
Why Pillar 2 matters in the GCC
Historically, several GCC states levied little or no corporate income tax. The introduction of the GloBE rules, alongside the UAE's federal corporate tax, means that low-taxed profits may now attract a top-up tax either locally or in another jurisdiction within the group.
Where a jurisdiction does not collect the top-up itself, that taxing right can shift abroad under the Income Inclusion Rule (IIR) or the Undertaxed Profits Rule (UTPR). For most groups, the most efficient response is to ensure any top-up tax is collected at home through a Qualified Domestic Minimum Top-up Tax (QDMTT).
Implementation status at a glance
Adoption across the region is moving at different speeds. The picture below reflects the broad direction of travel rather than a substitute for jurisdiction-specific advice.
- United Arab Emirates, domestic minimum top-up tax effective for financial years beginning on or after 1 January 2025.
- Kingdom of Saudi Arabia, actively assessing GloBE adoption alongside existing transfer pricing rules.
- Qatar, Kuwait, Bahrain and Oman, at varying stages of consultation and drafting, with domestic top-up taxes under active consideration.
Reporting obligations
In-scope groups must prepare a GloBE Information Return and, where a domestic top-up tax applies, a separate domestic filing. The information return is detailed, jurisdiction-by-jurisdiction, and draws on data that often sits outside the traditional tax function.
Common data challenges
- Mapping consolidated financial accounts to GloBE income and covered taxes.
- Identifying and applying the available safe harbours in the transition period.
- Reconciling deferred tax positions across multiple reporting standards.
Practical steps for groups
Groups that begin preparation early consistently face fewer surprises during the first filing. A pragmatic sequence is to scope the group, run a transitional safe harbour assessment, then close any data gaps well ahead of the deadline.
“The groups that treat Pillar 2 as a data and systems project, not just a tax filing, are the ones that stay in control of the outcome.”
How TPTAX can help
We provide research, training and limited scope advisory support on Pillar 2 across Africa and the Middle East (GCC countries). Get in touch to discuss your group's position.