Requires constituent-entity transactions to follow the arm's-length principle, use the most appropriate method and be supported by required documentation.
What should you do now?Align contracts, invoices, pricing policy and comparables with the amount used in the computation.
What does the official Article provide?
The official source is Arabic. This English commentary is explanatory and is not presented as an official translation.
Requires constituent-entity transactions to follow the arm's-length principle, use the most appropriate method and be supported by required documentation.
This is a verified summary rather than a verbatim reproduction. Consult the official Arabic text, the Law and later decisions before making a final determination.
What does the Article mean in plain language?
Adjust cross-border transactions with other Constituent Entities to an arm's-length outcome. Select the most appropriate prescribed method using the facts, functions, assets and risks; an agreed intra-group price is insufficient. The Article also addresses losses on asset transfers between Bahrain group entities. Maintain the local and master files with the prescribed content and in the manner required by NBR. The local file explains entity transactions and comparables; the master file explains group operations, financing and intangibles. Reconcile amounts to accounts and agreements and consider an applicable advance pricing agreement.
Financial reporting, tax, transfer-pricing and consolidation teams.
Align contracts, invoices, pricing policy and comparables with the amount used in the computation.
Using the master file instead of transaction analysis or selecting a margin without comparability support.
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Before relying on the result
Is this Article enough on its own?
Usually not. Read it with the connected Law Article, definitions, any effective election and current NBR guidance, especially for an amount or deadline.
Does NBR guidance replace the Regulations?
No. Guidance explains application and supports procedures and examples, but current legislation and decisions prevail in case of inconsistency.