Article 1
Definitions
Establishes the Law's vocabulary, including entity, constituent entity, group, permanent establishment, Model Rules, tax and minimum rate.
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Decree-Law No. 11 of 2024
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- Chapters
- 7
- Articles
- 44
- Review status
- Verified
01Chapter 1 · Articles 1–2Which concepts underpin the Law, and how should it be read?
Preliminary provisions
Which concepts underpin the Law, and how should it be read?
Preliminary provisions
This chapter matters if:Anyone beginning a group-scope review or reading any computation or obligation in the Law.
02Chapter 2 · Articles 3–7Is the group or entity in scope, and which income and taxes enter the computation?
Scope and charging provisions
Is the group or entity in scope, and which income and taxes enter the computation?
Scope and charging provisions
This chapter matters if:MNE groups, Bahrain entities, joint ventures and tax and accounting teams.
Article 3
Scope of the tax
Charges tax on Bahrain constituent entities and qualifying joint ventures where consolidated revenue reaches at least EUR 750 million in at least two of the four preceding fiscal years, adjusted for short or long periods.
Open practical commentaryArticle 4
Excluded entities
Excludes specified categories, including government entities, international and non-profit organisations, pension funds, certain investment funds, real-estate investment vehicles and qualifying subsidiaries.
Open practical commentaryArticle 5
Location of an entity
Determines entity and permanent-establishment location, including flow-through entities, stateless constituent entities and Bahrain tax residence.
Open practical commentaryArticle 6
Constituent entity income or loss
Starts from financial-accounting net income or loss before consolidation eliminations, subject to the adjustments detailed in the Regulations.
Open practical commentaryArticle 7
Covered and adjusted covered taxes
Identifies taxes that may enter the effective-tax-rate numerator and links adjusted covered taxes to current tax expense on an accrual basis, subject to regulatory adjustments.
Open practical commentary03Chapter 3 · Articles 8–16How are the rate and tax computed, and do exclusions or safe harbours apply?
Tax computation and safe harbours
How are the rate and tax computed, and do exclusions or safe harbours apply?
Tax computation and safe harbours
This chapter matters if:Tax, accounting, reporting and transfer-pricing teams in large groups.
Article 8
Effective tax rate
Computes the effective tax rate jurisdictionally for Bahrain entities in the same group by dividing adjusted covered taxes by net income, with separate rules for special categories.
Open practical commentaryArticle 9
Tax computation
Sets the top-up percentage, taxable income and tax due, including additional current tax and permanent-difference top-up amounts.
Open practical commentaryArticle 10
Substance-based income exclusion
Allows an exclusion based on qualifying payroll and tangible assets, using transitional percentages that move to 5% under the detailed rules.
Open practical commentaryArticle 11
Joint ventures
Defines a joint venture and its subsidiaries and requires a standalone computation as if they formed a separate group headed by the joint venture.
Open practical commentaryArticle 12
De minimis exclusion
Sets tax to zero on an annual election where three-year average revenue is below EUR 10m and average income is below EUR 1m or a loss, subject to special rules.
Open practical commentaryArticle 13
Transitional CbCR safe harbour
Provides transitional tests that may reduce tax to zero for periods beginning by 31 December 2026 and ending by 30 June 2028, with exclusions and qualified-report conditions.
Open practical commentaryArticle 14
Simplified-computation safe harbour
Sets tax to zero where the simplified routine-profits, de minimis or effective-rate test is met.
Open practical commentaryArticle 15
Initial phase of international activity
Reduces tax to zero for a limited period during the initial phase of international activity where the group operates in no more than six jurisdictions, has no more than EUR 50m of tangible assets outside the reference jurisdiction and meets the remaining conditions.
Open practical commentaryArticle 16
Restructuring, asset transfers and ownership structures
Directs the Regulations to govern asset and liability transfers, restructurings, entities joining or leaving a group and multi-parented groups.
Open practical commentary04Chapter 4 · Articles 17–25Who registers and files, and what are the deadlines, records and payments?
Procedures and tax obligations
Who registers and files, and what are the deadlines, records and payments?
Procedures and tax obligations
This chapter matters if:The filing constituent entity, compliance and finance teams and Bahrain group members.
Article 17
Registration and deregistration
Requires the filing constituent entity to register, empowers the NBR to appoint, register or amend data and regulates deregistration.
Open practical commentaryArticle 18
Filing constituent entity
Requires Bahrain entities, or a joint venture and its subsidiaries, to appoint one filing entity responsible for registration, returns, payment, elections and notifications.
Open practical commentaryArticle 19
Financial statements
Defines acceptable consolidated financial statements and alternatives where statements are not prepared or do not follow an acceptable standard, including material competitive distortions.
Open practical commentaryArticle 20
Elections
Distinguishes annual and five-year elections and sets their duration, cancellation and re-election consequences.
Open practical commentaryArticle 21
Tax return and amendment
Requires a return for each fiscal year, prompt amendment when an error is found and notification where the revenue test is no longer met.
Open practical commentaryArticle 22
Payment of tax
Requires advance payments during the fiscal year and one or more post-year-end settlements under regulatory deadlines and procedures.
Open practical commentaryArticle 23
Tax refund
Allows recovery of tax overpaid or refundable under the Regulations and requires the NBR to decide the request under prescribed procedures.
Open practical commentaryArticle 24
Currency
Requires computation and payment in Bahraini dinars unless the Law provides otherwise and leaves conversion rules to the Regulations.
Open practical commentaryArticle 25
Record keeping
Requires relevant entities to retain accounting records, statements, invoices and documents in paper or electronic form and make them available to the filing entity and NBR.
Open practical commentary05Chapter 5 · Articles 26–34What happens on audit, assessment or penalty, and how are review and objection deadlines protected?
Administrative accountability and disputes
What happens on audit, assessment or penalty, and how are review and objection deadlines protected?
Administrative accountability and disputes
This chapter matters if:Entities receiving an information request, assessment, penalty or NBR decision and their advisers.
Article 26
Tax audit
Allows the NBR to audit returns or compliance and request information, explanations and documents from any related party.
Open practical commentaryArticle 27
Assessment of tax due
Allows reassessment for error and assessment where information or a return is missing, and permits revision of an earlier assessment when new facts emerge.
Open practical commentaryArticle 28
Administrative penalties
Sets penalties for registration, return, payment, incorrect data, obstruction, failure to provide records and other breaches, using percentage or maximum caps by violation.
Open practical commentaryArticle 29
Joint liability
Makes Bahrain group entities, or a joint venture and its subsidiaries, jointly liable for tax and penalties and may extend liability through certain flow-through entities to non-individual owners.
Open practical commentaryArticle 30
Payment instalments
Allows the NBR to approve instalments for tax or penalties where sufficient grounds exist and to cancel the arrangement on default or other assessed grounds.
Open practical commentaryArticle 31
Review, objection and appeal
Creates three stages—NBR review, committee objection and court appeal—with core 60-day deadlines, deemed rejection rules and no automatic suspension of collection.
Open practical commentaryArticle 32
Tax Objections Committee
Provides for an independent and impartial expert committee to hear Article 31 objections, with procedure governed by the Regulations and ministerial decision.
Open practical commentaryArticle 33
Enforcement title and precautionary attachment
Makes the return and final assessment or penalty decision enforceable instruments and allows court-ordered precautionary attachment where dissipation threatens collection.
Open practical commentaryArticle 34
Limitation of refund claims
Bars a court claim to recover tax paid without due cause after five years from payment, subject to interruption including a refund application.
Open practical commentary06Chapter 6 · Articles 35–36When does a breach become tax evasion, and who may be criminally liable?
Criminal liability
When does a breach become tax evasion, and who may be criminally liable?
Criminal liability
This chapter matters if:Boards, managers, compliance teams and anyone handling records, returns or information.
Article 35
Tax evasion offence
Lists intentional evasion acts, imprisonment and fines, entity and management liability in specified cases, repeat offending, limitation, prosecution request and settlement.
Open practical commentaryArticle 36
Judicial enforcement powers
Gives duly designated officers judicial enforcement status for offences within their functions and permits assistance from public authorities.
Open practical commentary07Chapter 7 · Articles 37–44What are the NBR's powers and transitional rules, and when did the Law commence?
Final provisions
What are the NBR's powers and transitional rules, and when did the Law commence?
Final provisions
This chapter matters if:Groups, advisers, tax agents and anyone reviewing powers, implementation and transition.
Article 37
Information powers, exchange and confidentiality
Requires public and private persons to provide information, permits treaty-based international exchange and protects confidentiality subject to specified disclosure grounds.
Open practical commentaryArticle 38
Tax agents
Prohibits acting as a tax agent without an NBR licence and keeps the filing entity responsible despite appointing an agent.
Open practical commentaryArticle 39
Fees
Authorises the Minister, with Cabinet approval, to set fees for services, certificates and licences under the Law.
Open practical commentaryArticle 40
Delegation of NBR functions
Allows the NBR, with ministerial approval, to assign some functions to a government or non-government body.
Open practical commentaryArticle 41
General anti-avoidance rule
Allows the NBR to disregard arrangements producing a tax advantage where they lack genuine commercial purpose or a main purpose is an advantage contrary to the Law's object.
Open practical commentaryArticle 42
Transitional provisions
Regulates deferred tax assets and liabilities in the transition year, excludes certain assets arising after 30 November 2021 and addresses pre-transition asset transfers.
Open practical commentaryArticle 43
Regulations and decisions
Authorises the Minister, with Cabinet approval, to issue the Regulations and decisions consistently with relevant international rules, guidance and commentary.
Open practical commentaryArticle 44
Commencement
Provides for implementation and commencement on 1 January 2025 and publication in the Official Gazette.
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