{"id":150310,"date":"2026-10-08T10:32:32","date_gmt":"2026-10-08T10:32:32","guid":{"rendered":"https:\/\/www.legal500.com\/guides\/?post_type=comparative_guide&#038;p=150310"},"modified":"2026-10-08T10:32:32","modified_gmt":"2026-10-08T10:32:32","slug":"bahrain-tax","status":"publish","type":"comparative_guide","link":"https:\/\/www.legal500.com\/guides\/chapter\/bahrain-tax\/","title":{"rendered":"Bahrain: Tax"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-150310","comparative_guide","type-comparative_guide","status-publish","hentry","guides-tax","jurisdictions-bahrain"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">KPMG<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/02\/KPMG_NoCP_Blue_CMYK_V2_284.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">KPMG<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/02\/KPMG_NoCP_Blue_CMYK_V2_284.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Tax laws and regulations applicable in Bahrain<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How often is tax law amended and what is the process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Tax law is introduced by issuance of Decree Law, with further substantive guidance and procedural provisions typically clarified by way of issuance of Executive Regulations. The National Bureau for Revenue issues further clarifications through non-binding guides and manuals.<\/p>\n<p>The tax law is not generally amended and changes or further clarifications are typically only made through update of the guides and manuals.<\/p>\n<p>Note that as of date, Bahrain has:<\/p>\n<ul>\n<li>Implemented a Value Added Tax (VAT) regime, effective from 2019<\/li>\n<li>Implemented a Domestic Minimum Top-up Tax regime, effective from fiscal years starting on or after 1 January 2025<\/li>\n<li>Proposed introduction of Corporate Income Tax (CIT) from 1 January 2027<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal administrative obligations of a taxpayer, i.e. regarding the filing of tax returns and the maintenance of records?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Obligations vary by tax, but generally the tax obligations are as follows:<\/p>\n<ul>\n<li>Registration within the prescribed timelines<\/li>\n<li>Filing of returns and payment of tax liabilities<\/li>\n<li>Maintenance of records<\/li>\n<\/ul>\n<p><strong>VAT<\/strong><\/p>\n<ul>\n<li>Monthly VAT return filings where annual taxable supplies exceed BHD 3 million and quarterly if the annual taxable supplies are less than BHD 3 million. Option for annual filings if below threshold of BHD 100,000.<\/li>\n<li>A VAT payer must retain photocopies of all tax invoices issued for a period of 10 years from the end of the VAT period as per the extension by the NBR.<\/li>\n<\/ul>\n<p><strong>DMTT<\/strong><\/p>\n<ul>\n<li>Appoint a Filing Constituent Entity<\/li>\n<li>Register within 120 days of the start of the first in-scope fiscal year<\/li>\n<li>Advance tax payments are due within 60 days after each three-month advance payment period, if not eligible for an exclusion or safe harbor.<\/li>\n<li>Records to be kept for five years, extended to ten years for real estate and capital assets.<\/li>\n<\/ul>\n<p><strong>CIT (expectations)<\/strong><\/p>\n<ul>\n<li>Withholding tax filings<\/li>\n<li>Advance tax filings<\/li>\n<li>Annual CIT return filing<\/li>\n<li>Transfer Pricing (TP) filings and documentation<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Who are the key tax authorities? How do they engage with taxpayers and how are tax issues resolved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The National Bureau for Revenue (NBR) is the Bahrain tax authority which administers the prevalent tax regimes and procedures in Bahrain.<\/p>\n<p>Engagement with taxpayers is typically digital and most issues are resolved by private non-binding clarifications in response to queries and requests for rulings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are tax disputes heard by a court, tribunal or body independent of the tax authority? How long do such proceedings generally take?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A three-stage mechanism is prescribed as part of the dispute resolution process:<\/p>\n<ul>\n<li>Independent review by the NBR.<\/li>\n<li>Objection to the Tax Objections Committee\/ Tax Appeals and Review Committee (TARC).<\/li>\n<li>Appeal to a competent court in Bahrain.<\/li>\n<\/ul>\n<p>Information about typical court proceeding durations for tax cases is not available in the public domain, and Bahrain\u2019s tax dispute case law is in its nascent stages given the recent introduction of these taxes.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical deadlines for the payment of taxes? Do special rules apply to disputed amounts of tax?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>&nbsp;<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"176\"><strong>Tax<\/strong><\/td>\n<td width=\"318\"><strong>Payment deadline<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"176\">VAT<\/td>\n<td width=\"318\">Due by the end of the month following the VAT period, along with the filing of the VAT return.<\/td>\n<\/tr>\n<tr>\n<td width=\"176\">DMTT (advance payments)<\/td>\n<td width=\"318\">Within 60 days after the end of each three-month period of the fiscal year.<\/td>\n<\/tr>\n<tr>\n<td width=\"176\">DMTT (final return\/ outstanding payment)<\/td>\n<td width=\"318\">By the return due date:<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 18 months after the end of the transition fiscal year;<\/p>\n<p>\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 15 months thereafter.<\/td>\n<\/tr>\n<tr>\n<td width=\"176\">CIT<\/td>\n<td width=\"318\">Our expectations for filings and deadlines under Bahrain CIT are as follows:<\/p>\n<p>\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Quarterly filings for withholding tax is expected, due to filed along with any payments due in the month following the quarter.<\/p>\n<p>\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Advance tax payments for each advance tax period (expected to be quarterly), due to filed along with any payments due to be filed within 60 days from the end of the advance tax period.<\/p>\n<p>\u2022\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Annual return filing expected within 6 months from the end of the Fiscal Year.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>A taxpayer is not required to pay the disputed tax in order to request an independent NBR review. However, further proceedings require payment of the disputed amounts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are tax authorities subject to a duty of confidentiality in respect of taxpayer data?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The NBR holds an ISO 27001:2022 certification for the establishment and maintenance of an effective Information Security Management System (ISMS), for safeguarding NBR information assets against evolving threats, ensuring confidentiality, integrity, and availability of data.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is this jurisdiction a signatory (or does it propose to become a signatory) to the Common Reporting Standard?  Does it maintain (or intend to maintain) a public register of beneficial ownership?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bahrain implemented automatic exchange of financial account information from September 2018, adopting the wider approach, which requires reporting Financial Institutions to identify financial accounts held by tax residents of all jurisdictions other than residents of Bahrain and the USA.<\/p>\n<p>The Bahrain Ministry of Industry and Commerce (MoIC) collects and maintains ultimate beneficial ownership (UBO) information in the form of a beneficial ownership register. This is currently a regulatory filing requirement and the information is not publicly accessible. We do not expect this requirement to change.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the tests for determining residence of business entities (including transparent entities)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, the relevant article(s) of a tax treaty or domestic tax laws of other countries\u00a0are considered for determining the residence of business entities. There are certain tests provided under the Bahrain DMTT legislation for determining the location of a constituent entity.<\/p>\n<p>The proposed Bahrain CIT legislation is likely to provide for specific tests to determine the tax residence of an entity as follows:<\/p>\n<ul>\n<li>A legal person established or created under the Laws of Bahrain<\/li>\n<li>A legal entity that has been established or created under the Laws of a foreign jurisdiction and has its place of effective management in Bahrain<\/li>\n<\/ul>\n<p>A person is considered resident for Bahrain VAT where the person has a Place of Business or Fixed Establishment in Bahrain.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do tax authorities in this jurisdiction target cross border transactions within an international group? If so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Bahrain DMTT legislation provides specifically for transfer pricing requirements for cross-border transactions undertaken by constituent entities of the same Multinational group. Such constituent entities are required to make an adjustment for any values that are not in line with the arm\u2019s length pricing of such a transaction and are required to maintain transfer pricing documentation in the form of Master File and Local File.<\/p>\n<p>We expect the same under Bahrain CIT as well.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a controlled foreign corporation (CFC) regime or equivalent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bahrain does not impose a CFC or equivalent regime. We don\u2019t expect any such provisions in the CIT Law as well.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a transfer pricing regime?  Is there a \"thin capitalization\" regime?  Is there a \"safe harbour\" or is it possible to obtain an advance pricing agreement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Multinational groups subject to the Bahrain DMTT regime are subject to transfer pricing (TP) requirements and are required to maintain transfer pricing documentation as well.<\/p>\n<p>The proposed Bahrain CIT regime is likely to provide for a TP regime for related party transactions, in line with the OECD TP framework.<\/p>\n<p>There are likely no thin capitalization rules under the proposed Bahrain CIT regime, however interest-deduction limitation rules are expected for the taxable income computation, with a safe harbor for the deduction limitation rule.<\/p>\n<p>The Bahrain DMTT regime provides for a mechanism for advance pricing agreements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a general anti-avoidance rule (GAAR) and, if so, how is it enforced by tax authorities (e.g. in negotiations, litigation)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are general anti-avoidance rules provided under the Bahrain DMTT legislation and expected under the proposed CIT legislation. As Bahrain tax is in its nascent stages, there is no sufficient precedence or case law on the enforcement of such rules by the tax authorities.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a digital services tax? If so, is there an intention to withdraw or amend it once a multilateral solution is in place?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, Bahrain does not impose any digital services taxes. There are no announcements or information in public domain on the introduction of a digital services tax regime.<\/p>\n<p>The Bahrain VAT law contains specific provisions on the applicability of Bahrain VAT on services that are considered to be electronic services.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How has the BEPS 2.0 two-pillar approach been implemented in your jurisdiction (or plans for implementation)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bahrain joined the Inclusive Framework of BEPS on May 2018 in order to adopt internationally agreed standards and implement best practices to combat tax evasion and avoidance.<\/p>\n<p>Bahrain introduced the Domestic Minimum Top-up Tax (DMTT) regime in alignment with the OECD\u2019s Pillar Two requirements, effective from fiscal year starting on or after 1 January 2025.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How has the OECD BEPS program impacted tax policies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Bahrain as a member of the OECD Inclusive Framework has executed the following to adopt the internally agreed standard and best practices.<\/p>\n<ul>\n<li>Action 5 (Countering Harmful Tax Practices)<\/li>\n<li>Action 6 (Prevention of tax treaty abuse)<\/li>\n<li>Action 13 (Country-by-Country Reporting)<\/li>\n<li>Action 14 (Dispute Resolution Mechanism)<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax system broadly follow the OECD Model i.e. does it have taxation of: a) business profits, b) employment income and pensions, c) VAT (or other indirect tax), d) savings income and royalties, e) income from land, f) capital gains, g) stamp and\/or capital duties? If so, what are the current rates and how are they applied?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>&nbsp;<\/p>\n<table width=\"546\">\n<tbody>\n<tr>\n<td width=\"131\"><strong>Category\u00a0<\/strong><\/td>\n<td width=\"73\"><strong>Rate\u00a0<\/strong><\/td>\n<td width=\"342\"><strong>Application\u00a0<\/strong><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\" width=\"131\">Business profits<\/td>\n<td width=\"73\">46%<\/td>\n<td width=\"342\">Applies to companies engaged in the extraction or refining of hydrocarbons.<\/td>\n<\/tr>\n<tr>\n<td width=\"73\">15%<\/td>\n<td width=\"342\">DMTT applies to in-scope Bahrain constituent entities.<\/td>\n<\/tr>\n<tr>\n<td width=\"73\">10%<\/td>\n<td width=\"342\">Proposed CIT applies from FY 2027.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Employment income and pensions<\/td>\n<td width=\"73\">0%<\/td>\n<td width=\"342\">No personal income tax.<\/p>\n<p>&nbsp;<\/p>\n<p>Social insurance contributions apply.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">VAT (or other indirect tax)<\/td>\n<td width=\"73\">10% \/ 0% \/ Exempt<\/td>\n<td width=\"342\">VAT introduced at 5% on 1 January 2019 and increased to 10% on 1 January 2022.<\/p>\n<p>&nbsp;<\/p>\n<p>Zero-rating applies to basic food items, healthcare, education, the first supply of new residential construction, local transport, oil and gas, and exports.<\/p>\n<p>&nbsp;<\/p>\n<p>Certain financial services and the sale and lease of real estate are exempt.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Savings income and royalties<\/td>\n<td width=\"73\">0%<\/td>\n<td width=\"342\">No tax on savings income.<\/p>\n<p>&nbsp;<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Withholding tax<\/td>\n<td width=\"73\">5%\/ 0%<\/td>\n<td width=\"342\">Proposed withholding tax regime on royalties, interest and service fees to non-residents at 5%.\u00a0Dividends paid to non-residents subject to 0%.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Income from land<\/td>\n<td width=\"73\">Nil \/ 10%<\/td>\n<td width=\"342\">No tax on rental income as such. A 10% municipality tax is levied on the rental value of commercial and residential property let to expatriates, payable by the property owner.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Capital gains<\/td>\n<td width=\"73\">Nil<\/td>\n<td width=\"342\">No separate capital gains tax regime.<\/p>\n<p>Capital gains may nonetheless be included as part of the DMTT\/ CIT base where no adjustment\/ exemption applies.<\/td>\n<\/tr>\n<tr>\n<td width=\"131\">Stamp and capital duties<\/td>\n<td width=\"73\">1.7% \/ 2%<\/td>\n<td width=\"342\">Stamp duty applies to the transfer and\/or registration of real estate at 2%, reduced to 1.7% where paid within two months of the transaction date.<\/p>\n<p>No capital duty.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is business tax levied on, broadly, the revenue profits of a business computed in accordance with accounting principles?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, business tax is likely to be levied on the taxable profits which is the accounting profit after tax adjustments. The accounting profit would likely be the amount that would have been computed as per the relevant accounting principles.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are common business vehicles such as companies, partnerships and trusts recognised as taxable entities or are they tax transparent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, Bahrain CIT likely to apply on resident natural or legal persons, whether public or private, or any other form of company.<\/p>\n<p>A local partnership that does not have a separate legal personality from its partners and a trust will likely be treated as tax-transparent under the proposed Bahrain CIT regime.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is liability to business taxation based on tax residence or registration?  If so, what are the tests?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As per the proposed Bahrain CIT regime, CIT is likely to apply on taxable income earned from business activities conducted by resident persons and non-residents that have a permanent establishment. A person may be deemed resident in the following cases:<\/p>\n<ul>\n<li>A legal person established or created under the Laws of Bahrain<\/li>\n<li>A legal entity that has been established or created under the Laws of a foreign jurisdiction and has its place of effective management in Bahrain<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any favourable taxation regimes for particular areas (e.g. enterprise zones) or sectors (e.g. financial services)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, income derived from certain business activities may likely be exempt. However, further details on the exemption is awaited upon the release of the Executive Regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any special tax regimes for intellectual property, such as patent box?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no such special tax regimes expected for holding of intellectual property.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is fiscal consolidation permitted? Are groups of companies recognised for tax purposes and, if so, are there any jurisdictional limitations on what can constitute a tax group? Is there a group contribution system or can losses otherwise be relieved across group companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, tax grouping is likely to permitted for resident persons and Bahrain PEs of non-residents. We expect that a member of a tax group should have at least 75% ownership interest in the other member(s) or both members should be directly or indirectly owned at least 75% by a common person.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any withholding taxes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, withholding tax applies may likely apply as follows:<\/p>\n<ul>\n<li>0% on dividends<\/li>\n<li>5% on interest, royalties and services<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any environmental taxes payable by businesses environmental tax credits available to businesses?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No such environmental taxes or environmental tax credits expected in Bahrain.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is dividend income received from resident and\/or non-resident companies taxable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the proposed CIT regime, dividend income received from a Bahrain resident legal entity is likely to be exempt.<\/p>\n<p>Dividend income received from a non-resident source is likely to be required to meet the participation exemption conditions to be exempt.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the advantages and disadvantages offered by your jurisdiction to an international group seeking to relocate activities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><ul>\n<li>Bahrain has a lower cost of doing business than the GCC average.<\/li>\n<li>The Bahrain International Investment Park (BIIP) is a facility that foreign businesses can consider for direct foreign investment, offering certain tax exemptions for businesses that setup in BIIP.<\/li>\n<li>Bahrain CIT law is expected to offer certain exemption for distribution\/ logistics businesses.<\/li>\n<li>Bahrain has close proximity with the Kingdom of Saudi Arabia (KSA) sharing the King Fahad Causeway which provides land connectivity into KSA and facilitates trade and business activities between the two countries.<\/li>\n<li>The proposed CIT rate of 10% in Bahrain is relatively a low rate in comparison to other global tax regimes.<\/li>\n<li>Bahrain offers multiple resources which businesses can utilize and also schemes for supporting businesses as well.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">2746<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/150310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=150310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}