Mergers and Acquisitions (M&A) in the Gulf Cooperation Council (GCC) region have always been driven by investor-friendly policies, tax advantages, and the region’s booming economic landscape. But the major tax reforms introduced in 2024 are set to reshape the M&A landscape in 2025, significantly impacting deals in the GCC region. 

If you’re looking to buy, sell, or invest in a business in the GCC, you can’t afford to ignore the tax shifts that are reshaping dealmaking. From new corporate tax rates to minimum top-up taxes, these changes are directly impacting due diligence and business valuations.  

So, let’s dive into what’s new, what it means for deals in the GCC, and how you can stay ahead of the curve. 

The Key Tax Reforms in the GCC in 2024 

UAE: Corporate Tax Takes Center Stage 

• 15% Minimum Top-Up Tax for Multinationals – As part of the OECD’s global tax framework, the UAE introduced a 15% Domestic Minimum Top-Up Tax (DMTT) on multinational enterprises (MNEs) with global revenues of at least €750 million. This move is aimed at preventing profit shifting and ensuring large corporations contribute their fair share. 

• Tax Incentives in the Works – To offset the impact of the new tax, the UAE is considering R&D tax credits (30%-50%) and high-value employment tax credits, making the country even more attractive for innovation-driven companies. 

Kuwait: Following Suit with the 15% Minimum Tax 

In December 2024, Kuwait confirmed the implementation of a 15% DMTT on MNEs, effective January 2025. This move aligns with international tax standards and signals the country’s commitment to diversifying its revenue sources. 

Saudi Arabia: Tax Amnesty and VAT Adjustments 

• Tax Amnesty Extended – Saudi Arabia extended its tax amnesty program, offering businesses relief and a chance to correct past tax filings without severe penalties. 

• VAT Amendments on the Horizon – The government is tweaking Value Added Tax (VAT) laws, aiming to provide more clarity and improve compliance measures. 

Curious about what’s shaping M&A deals in the GCC beyond tax reforms in 2025? Click to explore the key trends and insights. 

Deals in the GCC: How These Tax Changes Impact Due Diligence? 

With tax laws evolving, deals in the GCC region now require deeper scrutiny. Investors can no longer take tax advantages for granted, and buyers need to be more cautious when evaluating a target company’s financials. 

1. Enhanced Tax Compliance Checks 

No one wants to inherit hidden tax liabilities. Buyers now need to meticulously review a target company’s tax history, ensuring all tax filings and payments are up to date. The last thing you want is an unpleasant surprise post-acquisition. 

2. Reassessing Tax Liabilities 

With new corporate taxes in place, the cost of doing business has changed. Companies that once thrived under a tax-free environment now need to factor in new obligations, which could impact financial projections and valuation multiple which can have a serious impact on deals in the GCC region. 

3. Profitability and EBITDA Adjustments 

Valuation models are shifting. Since corporate tax eats into net profits, EBITDA calculations need to be adjusted to reflect post-tax earnings. When planning for deals in the GCC region, buyers and investors will need to revisit their financial models to ensure accurate pricing. 

4. Tax-Efficient Deal Structuring 

Dealmakers are now exploring alternative structures to optimize tax outcomes. Should you go for an asset purchase instead of a share acquisition? How can you leverage holding companies to reduce tax exposure? These are the kinds of questions investors need to ask in today’s environment. 

Want to have more insights on the due diligence for Middle East deals? Explore our article. 

Deals in the GCC Region: What This Means for Valuation? 

In an M&A transaction, valuation is everything. With taxes now playing a bigger role, companies must rethink how they assess business worth. 

• Earnings Adjustments: The introduction of corporate tax means earnings projections need to be adjusted accordingly. What looks like a profitable company today may not be as attractive after tax obligations are factored in. 

• Discount Rates: Higher tax liabilities introduce more financial risk, impacting discount rates used in valuation models. 

• Asset Valuation: If capital gains taxes or other transaction costs come into play, they need to be accounted for in the valuation process. 

Simply put, valuation methods that worked in the past may no longer be reliable in today’s tax environment and deals in the GCC.  

If you want to know more about the shift in business valuation, click here. 

MS: Your Trusted Partner for Tax-Smart Deals in the GCC 

The evolving tax landscape in the GCC is reshaping M&A transactions, making due diligence, valuation, and deal structuring. MS is your trusted partner in navigating these changes with confidence. As a leading advisory firm specializing in M&A, Transaction Advisory, Due Diligence, and Business Valuation, we help businesses assess tax risks, optimize deal structures, and ensure compliance with the latest regulations. With deep expertise in the UAE, DIFC, ADGM, and the broader GCC market, we provide strategic insights that minimize liabilities and maximize returns.