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.
What should you do now?Before implementation, document commercial purpose, alternatives, non-tax effects and alignment between contracts and actual conduct.
What does the official Article provide?
The official source is Arabic. This English commentary is explanatory and is not presented as an official translation.
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.
This is a verified summary, not a substitute quotation. The complete official Arabic text is linked below and must be read with the Regulations and later decisions for a final decision.
What does the Article mean in plain language?
Formal compliance may not suffice where economic reality and commercial purpose do not align, and the NBR may reconstruct the liability on a fair and appropriate basis.
Groups, advisers, tax agents and anyone reviewing powers, implementation and transition.
Before implementation, document commercial purpose, alternatives, non-tax effects and alignment between contracts and actual conduct.
Creating a later document asserting commercial purpose without supporting facts or prior decisions.
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Is the Article enough on its own?
Usually not. The Decree-Law states the rule, the Regulations detail the computation or procedure and guidance explains application. Use all three for an obligation, amount or deadline.
Are OECD materials binding by themselves?
Not every international document is Bahrain legislation by itself. It is used within the Law's referrals or a competent adoption instrument, while current Bahrain legislation and decisions remain controlling.