Cross-border Tax Talks Pillar Two: Middle East Roundup
Dec 22, 2025
Hanan Abboud, a Dubai-based tax expert leading PwC's Pillar Two initiatives in the Middle East, shares insights on the intricate corporate tax landscape across the GCC. She discusses the unique aspects of Zakat in Saudi Arabia and Kuwait, along with the prevalence of withholding taxes and treaty networks. Hanan explains the intricacies of Bahrain's upcoming QDMTT and contrasts it with Oman and Qatar's approaches. She emphasizes the compliance challenges posed by data collection and urges Middle Eastern firms to start addressing Pillar Two requirements promptly.
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GCC Corporate Tax Landscape Varies Widely
- GCC countries historically relied less on corporate tax but systems exist across the region with meaningful variation by country.
- UAE introduced corporate tax in 2023 and Saudi, Kuwait, Qatar, Oman and others have differing rates and rules affecting multinational structuring.
Zakat Treated As Covered Tax
- Zakat is a mandatory religious levy in Saudi and Kuwait and is treated as a tax in financial statements.
- Hanan confirms Zakat qualifies as a covered tax under Pillar Two rules.
Withholding And Treaty Patterns
- Withholding taxes are common across Middle East countries, though Bahrain is an exception.
- GCC countries have good global treaty networks but surprisingly few treaties between each other.