GCC countries: from tax havens to global business hubs
The Gulf Cooperation Council (GCC) is currently going through its most significant fiscal transformation since its formation.
For years, the region has attracted multinational corporations with a ‘zero taxation’ regime, leading to the perception by businesses and governments globally that companies are moving to the region with a view to profit shifting to minimise tax burdens.
Now, a global minimum corporate tax rate of 15 percent, championed by the OECD and embraced by more than 140 countries, is seeking to dismantle this practice.
Under the proposed tax regime, which is being legislated in several countries including the GCC, large Multinational enterprises (MNEs) with global turnover over EUR 750m equivalent in two out of four previous years will operate under greater transparency.
GCC population increased by 1mln in 2023
The population of the GCC countries reached 57.6 million in 2023, compared to 56.6m in 2022, according to a new report.
Males accounted for 62.4 percent of the population, while females made up 37.6pc, the Atlas of GCC Statistics for 2024 said.
The population density was 23.9 people per square kilometre, and the GCC countries cover a total area of 2.4msqkm.
The GCC Statistical Centre released the ninth edition of the Atlas of GCC Statistics for 2024, featuring key statistical maps, interactive data dashboards and geographical distributions of statistical information.
The Atlas links statistical data to its geographical location using graphs and maps, enhancing its value and application in planning across various fields.
Saudi Arabia estimates 2025 budget funding
Saudi Arabia will need estimated funding of SAR139 billion ($37.02 billion) in 2025 to cover the potential budget deficit.
Finance minister Mohammed Al Jadaan has approved the borrowing plan, the National Debt Management Cente said in a statement.
The ministry anticipates a budget deficit of SAR101 billion for the year, with nearly SAR38 billion of debt repayment.
The kingdom aims to continue diversifying local and international financing channels to efficiently meet funding needs in 2025. It said this will be achieved by issuing sovereign debt instruments, guided by well-defined and robust risk management frameworks.
Pak, UAE agree to further enhance economic, political, cultural ties
Pakistan and the United Arab Emirates (UAE) on Sunday agreed to further boost economic, political, and cultural ties.
This came during a meeting between Pakistani Prime Minister Shehbaz Sharif and UAE President Sheikh Mohammed bin Zayed Al Nahyan in Pakistan’s city of Rahim Yar Khan, where the latter arrived on his private visit.
The two leaders also discussed a wide range of issues, including economic collaboration, regional stability, climate change, and the promotion of mutual interests on the global stage, said a statement from the Prime Minister’s Office.
Sharif underscored Pakistan’s readiness to expand cooperation in sectors such as renewable energy, technology, trade, infrastructure and skill development.
Latest 15pc tax to affect 350 foreign firms and 20 Kuwaiti companies
The 15 percent tax law, set to take effect for multinational entities starting from tax periods beginning on or after January 1, includes a nine-month grace period for companies to apply for registration without incurring administrative penalties. The Ministry of Finance officials have already started compiling a list of both Kuwaiti and foreign companies operating in the local market that may be subject to the new tax provisions.
According to informed sources, the Ministry of Finance expects that approximately 20 Kuwaiti companies could fall under the new tax base based on the revenues reported in their 2023 budgets and the financial statements for the first nine months of 2024. In addition, between 300 and 350 multinational foreign entities are projected to be subject to supplementary tax payments to Kuwait. These taxes will be calculated at a rate equal to the difference between the actual tax rate and the 15 percent minimum, if the entity’s actual tax rate falls below that threshold.
Initial estimates suggest that the implementation of this multinational corporation tax could generate around 250 million Kuwaiti dinars annually for the public treasury, with some forecasts even suggesting 300 million dinars. This move is aligned with Kuwait Vision 2035, which aims to foster a diversified economy and improve financial sustainability by reducing dependency on a single source of income. The tax reform also aims to curb revenue leakage and enhance tax practices, in line with global trends.
Gulf’s businesses still prefer to get work done the hybrid way
The COVID-19 pandemic dramatically changed how experts work, pushing many companies in the Gulf to adopt remote and hybrid models.
Now, as major US corporations like Amazon and Google are calling employees back to the office, the region is at a crossroads. Some organizations follow suit, while others stick with flexible work arrangements. Experts explore the complexities of this evolving work landscape, highlighting challenges and opportunities for businesses in the region.
The pandemic forced a global experiment in remote work, and many organizations saw positive outcomes. Employees enjoyed greater flexibility, improved work-life balance, and reduced stress. Some studies even showed increased productivity.
Businesses benefited from lower overheads, access to a broader talent pool, and a smaller environmental footprint.
Despite these advantages, the return-to-office movement is gaining traction. Companies pushing for more in-office presence cite concerns about collaboration, innovation, and company culture while sparking a heated debate about the best way to work.