Giving effect to the attached Regulations
The first issuing Article gives effect to the attached Executive Regulations, making them the detailed complement to Decree-Law No. 11 of 2024.
93 Articles with practical commentary
Bahrain DMTT Executive Regulations
Start with the question closest to your work, then open the Article for its rule, action and connection to the Law and official guidance rather than navigating a 97-page document without a clear path.
Decision No. 172 of 2024
Complete coverage, not just a PDF referral
The official chapter order is preserved and paired with user questions. The map covers the two issuing Articles and all 93 Regulations Articles, including the transitional provisions at the end.
- Chapters
- 9
- Regulations Articles
- 93
- Issuing Articles
- 2
Before Regulations Article 1
The two issuing Articles
They are not empty links: each provision appears here because they establish the Regulations and their commencement.
Implementation, publication and commencement
The second issuing Article requires implementation by the relevant authorities and brings the Decision into effect on 1 January 2025 following publication in the Official Gazette.
01Chapter 1 · Articles 1–1Which detailed concepts underpin the Regulations' computations?
Preliminary provisions
Which detailed concepts underpin the Regulations' computations?
Preliminary provisions
This chapter matters if:Tax, accounting and legal teams beginning a scope review or computation file.
02Chapter 2 · Articles 2–4Are the group, entities and permanent establishments in scope?
Scope of application
Are the group, entities and permanent establishments in scope?
Scope of application
This chapter matters if:MNE groups, Bahrain entities, registration teams and group-structure teams.
Article 2
Excluded entities
Defines the tests for government bodies, international and non-profit organisations, pension and investment funds, and real estate investment vehicles. The exclusion itself and qualifying ownership exclusions are governed by Law Article 4.
Open practical commentaryArticle 3
Revenue threshold test
Determines the revenue included in the group test, aggregation of separate revenue lines, and preceding years without consolidated statements because the group’s entities were newly created.
Open practical commentaryArticle 4
Permanent establishment in Bahrain
Sets out when a non-resident entity has a Bahrain permanent establishment, the exceptions and the allocation of income or loss to it.
Open practical commentary03Chapter 3 · Articles 5–7In which jurisdiction is the entity or branch treated as located?
Location of an entity
In which jurisdiction is the entity or branch treated as located?
Location of an entity
This chapter matters if:Dual-resident entities, permanent establishments and groups with a location change during the year.
Article 5
Constituent entities located in more than one jurisdiction
Resolves dual location by reference to an applicable tax treaty or the prescribed tie-breaker rules where no usable treaty outcome exists.
Open practical commentaryArticle 6
Location of a constituent entity that is a permanent establishment
Links a permanent establishment's location to its legal category and the jurisdiction granted or exercising taxing rights over its net income.
Open practical commentaryArticle 7
Change in constituent entity location
Treats an entity as located in the jurisdiction where it was at the start of the first day of the fiscal year when its location changes during that year.
Open practical commentary04Chapter 4 · Articles 8–36How do financial accounts become GloBE income and covered taxes?
Accounting
How do financial accounts become GloBE income and covered taxes?
Accounting
This chapter matters if:Financial reporting, tax, transfer-pricing and consolidation teams.
Article 8
Computing financial accounting net income or loss
Determines the accounts and acceptable or authorised accounting standard used as the starting point, including conditions for local accounts and alternatives.
Open practical commentaryArticle 9
Material competitive distortions
Requires an accounting treatment causing a material competitive distortion to be aligned with the corresponding IFRS treatment, subject to a ministerial decision.
Open practical commentaryArticle 10
Allocating net income or loss between a main entity and a permanent establishment
Details allocation of income and loss between the main entity and its PE using separate accounts, treaty principles and the PE category.
Open practical commentaryArticle 11
Allocating net income or loss of a flow-through entity
Allocates a flow-through entity's income or loss by reference to transparency, owners and permanent establishments, with special UPE rules.
Open practical commentaryArticle 12
Adjustments determining constituent entity income or loss
Lists the adjustments converting accounting net income or loss into constituent entity income or loss, including taxes, dividends, equity items, penalties and shipping income.
Open practical commentaryArticle 13
Arm's length and transfer-pricing documentation
Requires constituent-entity transactions to follow the arm's-length principle, use the most appropriate method and be supported by required documentation.
Open practical commentaryArticle 14
Stock-based compensation adjustments
Allows an election to replace book expense with the locally deductible amount and prescribes adjustments for expiry or transfer.
Open practical commentaryArticle 15
Foreign-exchange gains or losses on hedging instruments
Allows qualifying FX gains or losses on equity-interest hedges to be treated as excluded equity gains or losses by election.
Open practical commentaryArticle 16
Fair-value and impairment adjustments
Allows a realisation-method election instead of fair-value or impairment movements and sets carrying values and transition adjustments.
Open practical commentaryArticle 17
Gains from disposals of Bahrain immovable property
Allows qualifying net gains on Bahrain immovable property sold outside the group to be allocated across the election year and four preceding years.
Open practical commentaryArticle 18
Intra-group financing arrangements
Excludes expense from an intra-group financing arrangement expected to increase a low-tax entity's expense without a corresponding increase in the high-tax counterparty's income.
Open practical commentaryArticle 19
Debt-release adjustments
Allows an election to exclude debt-release income in qualifying insolvency, creditor-arrangement or distress cases.
Open practical commentaryArticle 20
Dividends from portfolio shareholdings
Allows an election to include all portfolio-share dividends, including short-term holdings, rather than applying the usual exclusion.
Open practical commentaryArticle 21
Equity-investment inclusion election
Governs an election to include gains, losses and certain taxes relating to non-qualifying equity investments in the computation.
Open practical commentaryArticle 22
Treatment of financial instruments
Requires consistent debt-or-equity classification between issuer and holder and uses the issuer's classification where they differ.
Open practical commentaryArticle 23
Marketable transferable and qualified refundable tax credits
Treats qualifying refundable and marketable transferable tax credits as income when the right arises and details asset-linked and transfer effects.
Open practical commentaryArticle 24
Consolidation adjustments
Allows an election to use consolidated accounting eliminations for Bahrain entities in a tax-consolidated group while preventing duplication on entry or revocation.
Open practical commentaryArticle 25
Additional Tier One capital
Treats Additional Tier One distributions as expense for the issuer and income for the recipient for constituent-entity income or loss.
Open practical commentaryArticle 26
Insurance-company adjustments
Details adjustments for policyholder charges, returns and insurance-liability items when determining income or loss.
Open practical commentaryArticle 27
International shipping income exclusion
Excludes international shipping and qualified ancillary income where strategic or commercial ship management is effectively carried out in Bahrain, subject to defined limits.
Open practical commentaryArticle 28
Covered taxes
Excludes specified amounts from covered taxes, including qualified IIR, domestic top-up tax, certain allocation taxes and policyholder amounts.
Open practical commentaryArticle 29
Allocation of covered taxes
Allocates covered taxes among permanent establishments, transparent and hybrid entities, owners and distributed income according to source and tax type.
Open practical commentaryArticle 30
Adjusted covered taxes
Sets the current-tax starting point and the additions, reductions, deferred-tax and other adjustments producing adjusted covered taxes.
Open practical commentaryArticle 31
Additions to and reductions from covered taxes
Details additions to and reductions from covered taxes, including pre-tax entries, unpaid, refunded and uncertain-tax amounts.
Open practical commentaryArticle 32
Additional rules for adjusted covered taxes
Prevents the same covered-tax amount from adjusting current tax expense more than once when it falls under multiple items.
Open practical commentaryArticle 33
Temporary differences
Governs deferred-tax adjustment, remeasurement at the minimum rate, exclusions, five-year recapture and special cases.
Open practical commentaryArticle 34
Effect of carrying-value differences
Coordinates deferred tax with stock-compensation and realisation elections and carrying-value differences for assets and liabilities.
Open practical commentaryArticle 35
Loss election
Provides an alternative to deferred-tax adjustment by creating a loss deferred-tax asset at the minimum rate for later use.
Open practical commentaryArticle 36
Post-filing adjustments
Addresses increases or decreases in prior-year covered taxes and when ETR and tax must be recomputed or the adjustment taken currently.
Open practical commentary05Chapter 5 · Articles 37–41What happens on merger, demerger, ownership change or asset transfer?
Restructuring and ownership structures
What happens on merger, demerger, ownership change or asset transfer?
Restructuring and ownership structures
This chapter matters if:M&A, restructuring, legal, tax and consolidation teams.
Article 37
Revenue test on group merger and demerger
Reconstructs the revenue test for group mergers, acquisitions of standalone entities and demergers while preventing duplication of pre-merger transactions.
Open practical commentaryArticle 38
Constituent entities joining or leaving a group
Determines treatment in the acquisition or disposal year, including income, assets, deferred tax and the period of group membership.
Open practical commentaryArticle 39
Transfers of assets and liabilities
Sets recognition and carrying-value rules for transfers, with exceptions for reorganisations and specified non-arm's-length events.
Open practical commentaryArticle 40
Entities excluded from joint-venture treatment
Identifies entities not treated as joint ventures, including a UPE, excluded entity and certain entities owned through an excluded entity.
Open practical commentaryArticle 41
Multi-parented MNE group
Defines stapled structures and dual-listed arrangements and treats linked groups as one MNE group for specified purposes.
Open practical commentary06Chapter 6 · Articles 42–57How are the effective rate, exclusion and top-up tax computed?
Tax computation
How are the effective rate, exclusion and top-up tax computed?
Tax computation
This chapter matters if:Tax, accounting and financial-modelling teams responsible for the final computation.
Article 42
Effective tax rate computation
Sets Bahrain jurisdictional blending and the ETR formula while separating investment entities and other special categories.
Open practical commentaryArticle 43
Taxes excluded from the effective tax rate
Excludes specified taxes allocated from owners, main entities or certain distributions from the Bahrain entities' ETR.
Open practical commentaryArticle 44
Separate computation for joint ventures
Requires a joint venture and its subsidiaries to be computed as a separate group with the JV as its UPE.
Open practical commentaryArticle 45
Top-up tax percentage
Triggers the excess negative tax expense procedure where the calculated top-up percentage exceeds the minimum rate.
Open practical commentaryArticle 46
Substance-based income exclusion
Defines the payroll and tangible-asset carve-out and the transitional percentages that decline to steady-state rates.
Open practical commentaryArticle 47
Eligible payroll costs
Defines eligible compensation, employees and location while excluding capitalised amounts, excluded shipping costs and specified cases.
Open practical commentaryArticle 48
Eligible tangible assets
Defines eligible Bahrain property, equipment, natural resources and use rights, exclusions and the average carrying-value method.
Open practical commentaryArticle 49
Special substance-exclusion rules
Details payroll and asset treatment for PEs, flow-through entities, joint ventures and multi-parented groups.
Open practical commentaryArticle 50
Additional current top-up tax
Treats top-up tax resulting from a prior-year recalculation as additional current top-up tax in the recalculation year.
Open practical commentaryArticle 51
Permanent-difference top-up tax
Allows the excess negative tax expense procedure in specified permanent-difference cases, setting the year's permanent-difference top-up to zero under the election.
Open practical commentaryArticle 52
Excess negative tax expense procedure
Creates a carryforward for excess negative tax expense and prescribes its later reduction before ETR computation.
Open practical commentaryArticle 53
Tax of stateless constituent entities
Requires adjusted taxes and income for each stateless constituent entity to be computed separately rather than blended.
Open practical commentaryArticle 54
De minimis exclusion
Details average revenue and income or loss, exclusion of years without entities, annualisation of short periods and the election conditions.
Open practical commentaryArticle 55
Minority-owned constituent entity
Requires a separate computation for a minority-owned subgroup or entity and removes its data from the rest of the group's computation.
Open practical commentaryArticle 56
Simplified computation safe harbour
Leaves the simplified-computation safe harbour rules, conditions and controls to a ministerial decision approved by the Cabinet.
Open practical commentaryArticle 57
Initial international activity exclusion
Details jurisdiction count, tangible-asset value, stateless entities and the period for the initial international activity exclusion.
Open practical commentary07Chapter 7 · Articles 58–61How are flow-through and investment entities treated without distortion?
Tax neutrality
How are flow-through and investment entities treated without distortion?
Tax neutrality
This chapter matters if:Funds, investment entities, flow-through ownership structures and international tax teams.
Article 58
Flow-through ultimate parent entity
Reduces a flow-through UPE's income where owners are taxed at the required rate or are specified persons, with related tax and ownership adjustments.
Open practical commentaryArticle 59
Separate computation for investment entities
Requires a separate ETR and tax computation for investment and insurance investment entities unless a transparency or taxable-distribution election applies.
Open practical commentaryArticle 60
Tax transparency election for investment entities
Allows an investment entity to be treated as tax transparent where the owner is taxed under mark-to-market or a similar regime at or above the minimum rate.
Open practical commentaryArticle 61
Taxable distribution method election
Allows a non-investment owner to apply the taxable-distribution method to an investment entity interest where the required owner tax rate is met.
Open practical commentary08Chapter 8 · Articles 62–89What registration, filing, payment, audit and dispute steps are required?
Administrative procedures
What registration, filing, payment, audit and dispute steps are required?
Administrative procedures
This chapter matters if:The filing entity and compliance, finance, legal and governance teams.
Article 62
Registration
Requires the filing entity to register within 120 days from the first day of the transition year, with a 30-day commencement rule, and specifies application data.
Open practical commentaryArticle 63
Deregistration
Requires deregistration where the revenue test fails for five consecutive years, Bahrain entities cease to exist or MNE status ends, generally within 30 days of the event.
Open practical commentaryArticle 64
Appointment of the filing constituent entity
Requires written consent from represented entities and governs replacement within 30 days where the filing entity ceases, exits or changes location.
Open practical commentaryArticle 65
Elections
Classifies elections as five-year or annual and governs how they are made, revoked and locked in.
Open practical commentaryArticle 66
Tax returns
Requires filing within 15 months after year-end and specifies the computation and information schedules, simplified filing and qualified competent-authority exchange.
Open practical commentaryArticle 67
Revenue-test notification
Requires notification within 15 months after a year in which the group no longer meets the revenue test, supported by evidence.
Open practical commentaryArticle 68
Amended return procedures
Restricts amendments during audit or after reassessment and requires amounts, reasons and evidence for permitted or mandatory amendments.
Open practical commentaryArticle 69
Changes in fiscal year
Requires notice before the new fiscal year or within 30 days of the change and sets the data basis for resulting periods.
Open practical commentaryArticle 70
Payment of tax
Requires advance payments for three-month periods within 60 days, allows prior-year or current-year methods and requires final balance payment within 15 months.
Open practical commentaryArticle 71
Tax refunds
Permits refunds for excess payments, reduced liability or failed revenue test and governs decision timing, set-off and deferral during audit or dispute.
Open practical commentaryArticle 72
Currency for payment and computation
Determines when computation uses BHD or the consolidated reporting currency and how the result is translated into BHD using a consistent exchange-rate source.
Open practical commentaryArticle 73
Amounts expressed in euros
Requires euro-denominated thresholds and amounts to be translated using the average daily exchange rates for the immediately preceding December.
Open practical commentaryArticle 74
Records to be retained
Lists financial statements, payroll, asset, inventory, contract, invoice and computation evidence that must be retained.
Open practical commentaryArticle 75
Record-retention periods
Sets a five-year period after the relevant year-end, including specified excluded entities and cases affected by audit or dispute.
Open practical commentaryArticle 76
Method of retaining records
Allows originals, acceptable copies or secure accessible electronic storage while keeping the entity responsible even when a third party is used.
Open practical commentaryArticle 77
Tax audit
Governs audit notice and powers to inspect records and assets, request information and enter premises, with an exception where notice could prejudice the audit.
Open practical commentaryArticle 78
Tax audit results
Requires the audit-results decision to state core particulars, reasons and the net tax payable or refundable.
Open practical commentaryArticle 79
Assessment of tax due
Governs reassessment for error and assessment where no reliable basis exists and specifies the decision's required particulars.
Open practical commentaryArticle 80
Joint and several liability
Details Bahrain entities' liability on joining, leaving or moving and the continuing joint liability for the membership year.
Open practical commentaryArticle 81
Payment instalments for tax or administrative penalties
Allows an instalment request where returns are filed and inability to pay is evidenced and permits cancellation on default or evasion.
Open practical commentaryArticle 82
Review request
Requires payment of the fee and timely filing and specifies the challenged decision, grounds, legal basis and evidence.
Open practical commentaryArticle 83
Tax Objections Committee
Governs the Committee's meetings, confidentiality, experts, objection procedure, recommendation, fees and referred file.
Open practical commentaryArticle 84
General anti-avoidance rule
Details transactions and arrangements, commercial purpose, economic reality, tax advantage and adjustments available to the NBR.
Open practical commentaryArticle 85
Computation of time periods
Excludes the notification or event day, sets month-end rules, extends a deadline falling on an official holiday and uses the Gregorian calendar.
Open practical commentaryArticle 86
Methods of notification
Allows notice by post, email, the NBR system, posting or another method and determines receipt time, especially for electronic notice.
Open practical commentaryArticle 87
Conflict of interest
Bars an NBR employee from participating in a procedure involving specified family or financial connections.
Open practical commentaryArticle 88
Legal representative
Places a liquidator, trustee, receiver or appointed manager in the filing entity's position and requires notice within 30 days of appointment or cessation.
Open practical commentaryArticle 89
Explanatory guides and tax guidance
Authorises the NBR to issue guidance applying the Law and Regulations consistently with Model Rules, administrative guidance and commentary.
Open practical commentary09Chapter 9 · Articles 90–93Which special rules apply in the early years and transition year?
Transitional provisions
Which special rules apply in the early years and transition year?
Transitional provisions
This chapter matters if:Groups entering the regime from 2025 and reporting, deferred-tax and acquisition teams.
Article 90
Transitional CbCR safe harbour
Details qualified statements and CbCR data, de minimis, simplified ETR and routine-profits tests and the transition and disqualification rules.
Open practical commentaryArticle 91
Deferred tax assets or liabilities in the transition year
Governs transition-year deferred tax assets and liabilities at the lower of the minimum rate and recorded rate, with exclusions and remeasurement.
Open practical commentaryArticle 92
Acquirer-basis carrying value
Details carrying-value adjustments for assets transferred after 30 November 2021 and before the transition year, including deferred tax and intra-entity transfers.
Open practical commentaryArticle 93
Transition year on commencement
Defines the transition year as the first fiscal year beginning on or after 1 January 2025, from which obligations arise subject to anti-avoidance rules.
Open practical commentary