Allows an election to replace book expense with the locally deductible amount and prescribes adjustments for expiry or transfer.
What should you do now?Keep a plan-level record of options, book expense, local deduction and expiry date.
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 an election to replace book expense with the locally deductible amount and prescribes adjustments for expiry or transfer.
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?
A five-year election substitutes the tax-deductible stock compensation amount for the accounting expense across Bahrain Constituent Entities. It is a replacement, not an additional deduction. Starting the election after part of the accounting expense has accrued but before exercise requires the Paragraph C catch-up adjustment. If an option expires unexercised, previously deducted amounts are included as income in the expiry year. Revocation also has a specific adjustment. Track each award, exercise, expiry and deduction throughout the election.
Financial reporting, tax, transfer-pricing and consolidation teams.
Keep a plan-level record of options, book expense, local deduction and expiry date.
Taking both deductions or failing to recapture deductions when an option expires unexercised.
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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.