INCOME TAXES |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | 7. INCOME TAXES
NESR is a holding company incorporated in the British Virgin Islands (“BVI”), which imposes a 0% statutory corporate income tax rate on income generated outside the jurisdiction. NESR’s subsidiaries operate across multiple tax jurisdictions in the MENA region, where statutory tax rates generally range from 0% to 35%. However, the adoption of Domestic Minimum Top-Up Taxes (DMTT) under the OECD Pillar Two framework has, in many cases, resulted in effective tax rates exceeding local statutory minimums.
The Company recorded income tax expense of $14.9 million with an effective tax rate of 25.3% for the three-month period ended June 30, 2026, $4.3 million with an effective tax rate of 21.9% for the three-month period ended June 30, 2025, $22.0 million with an effective tax rate of 24.5% for the six-month period ended June 30, 2026 and $7.6 million with an effective tax rate of 22.9% for the six-month period ended June 30, 2025, respectively, in the Condensed Consolidated Statements of Operations.
The period-on-period increase in the effective tax rate is primarily driven by changes in geographic earnings mix, as well as higher pre-tax income relative to adjustments related to the Company’s uncertain tax positions and unrecognized tax benefits.
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