Introduction
The global tax landscape is undergoing one of the most significant transformations in decades. The OECD/G20 Inclusive Framework’s BEPS 2.0 initiative centered around Pillar One and Pillar Two aims to create a more transparent, fair, and harmonized global tax environment. For multinational businesses operating in the Middle East and North Africa (MENA), these reforms introduce both complexity and opportunity.
With many regional economies attracting foreign investment through tax incentives and free-zone structures, the introduction of the Global Minimum Tax (GMT) has profound implications. As the rules evolve, businesses in the region must reassess their structures, compliance functions, and future tax planning strategies.
This is where specialized advisory becomes essential. Firms like Fathalla FBC (https://fathalla-fbc.com/) are uniquely positioned to support companies in Egypt and across MENA in navigating BEPS 2.0, ensuring full compliance while optimizing tax efficiency.
What Is BEPS 2.0?
The Base Erosion and Profit Shifting (BEPS) project was designed to stop profit shifting to low-tax jurisdictions. BEPS 2.0 is the next phase of this global tax reform.
Pillar One: Reallocation of Profits
Pillar One reallocates taxing rights to countries where customers or users are located—even if the business has no physical presence there. This applies mainly to large multinational enterprises (MNEs) with significant digital or consumer-facing revenue.
Pillar Two: The Global Minimum Tax (GMT)
Pillar Two introduces a 15% minimum global corporate tax rate for MNEs with consolidated group revenue of €750 million or more. If a subsidiary pays an effective tax rate (ETR) below 15%, the parent company must pay a “top-up tax” to make up the difference.
This prevents companies from shifting profits to low-tax environments and creates a more level playing field across jurisdictions.
Why BEPS 2.0 Matters for the MENA Region
The MENA region is characterized by diverse tax systems—ranging from emerging corporate tax frameworks to well-established regimes. The introduction of GMT pressures governments and businesses to realign policies and structures.
Countries Implementing or Moving Toward GMT
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Egypt: Actively adopting OECD-aligned tax frameworks and expanding digital and transfer pricing regulations.
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Saudi Arabia (KSA): Leading the region with advanced ZATCA reporting and TP documentation requirements.
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UAE: New corporate tax regime combined with expected GMT alignment in coming years.
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Qatar & Oman: Strengthening TP rules and expanding corporate tax enforcement.
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Turkey: Already implementing domestic minimum tax features aligned with Pillar Two.
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Morocco & Tunisia: Introducing broader international tax reforms.
Key Regional Pressures
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Reduced reliance on tax incentives
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Increasing need for transparent and defensible structures
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Rising audit activity and documentation requirements
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Alignment with OECD, IMF, and global investment standards
How the Global Minimum Tax Impacts MENA Businesses
1. Free Zones & Tax Incentives Will Change
Many MENA jurisdictions rely on free-zone structures to attract investment. Pillar Two will require businesses to reassess the sustainability of these incentives.
2. Increased Reporting & Data Requirements
Businesses must calculate their Effective Tax Rate using Pillar Two compliant standards—more complex than traditional accounting.
3. Cross-Border Structures May Require Redesign
Holding companies, IP structures, and financing arrangements are heavily impacted.
4. Greater Scrutiny on Transfer Pricing
TP documentation, benchmarking, and intercompany policies must align with OECD requirements more closely than ever.
5. More Pressure on Corporate Governance
Boards, audit committees, and CFOs must ensure compliance across all jurisdictions.
Preparing for BEPS 2.0: A MENA Business Roadmap
Step 1 — Conduct a Pillar Two Impact Assessment
Understand where your ETR falls below 15% and whether top-up tax applies.
Step 2 — Review Group Structures
Identify high-risk jurisdictions, hybrid structures, and exposed subsidiaries.
Step 3 — Upgrade Data, Reporting & Compliance Systems
Businesses must maintain granular, jurisdiction-level tax data.
Step 4 — Strengthen Transfer Pricing Documentation
Annual Local File, Master File, benchmarking, and intercompany agreements must be updated consistently.
Step 5 — Develop a Future-Ready Tax Strategy
Businesses should align operations with sustainable tax premises—not short-term incentives.
How Fathalla FBC Supports BEPS 2.0 & Global Minimum Tax Compliance
Fathalla FBC (https://fathalla-fbc.com/) provides specialized advisory to help multinational businesses in Egypt and MENA navigate BEPS 2.0 effectively.
Our Capabilities Include:
1. BEPS 2.0 Readiness & Impact Assessments
We evaluate your ETR, analyze exposure to top-up tax, and develop a tailored compliance roadmap.
2. Global Minimum Tax Advisory & Modeling
We assist with:
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ETR modeling
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Top-up tax calculations
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Transition and safe-harbor rules
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Jurisdiction-specific risk assessments
3. Transfer Pricing Documentation & Policy Design
Our dedicated TP and global tax team supports:
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Local File & Master File
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Benchmarking studies
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Intercompany agreements
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TP risk mitigation
4. Restructuring & Tax Optimization Across MENA
We help businesses redesign their operational and financial structures to remain both compliant and efficient under the new rules.
5. Ongoing Compliance & Advisory
We monitor global developments and ensure your structures stay aligned with evolving OECD, EU, and local MENA regulations.
Why Fathalla FBC Is the Trusted Partner for International Tax in MENA
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Deep regional expertise in Egypt and MENA
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Strong capability in international tax, BEPS, and TP
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Hands-on advisory tailored to multinational groups
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Transparent, reliable, and forward-looking insights
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A full tax consulting ecosystem built to support complex cross-border needs
As BEPS 2.0 reshapes global taxation, businesses need a partner who understands the region and the world.
Fathalla FBC bridges this gap.
Conclusion
BEPS 2.0 and the Global Minimum Tax represent a turning point for international taxation. For companies operating in the MENA region, preparing today is essential to avoid future risks.
With the right strategy supported by strong advisory expertise organizations can stay compliant, protect their financial performance, and remain competitive in a rapidly changing global tax environment.
Fathalla FBC stands ready to support your journey toward full BEPS 2.0 readiness and Global Minimum Tax compliance.
Explore our services at: https://fathalla-fbc.com/
