| Status | Enacted Law |
| Law | On December 15, 2024, Bahrain issued Decision no. (172) of 2024 to provide for the Executive Regulations for the DMTT law. This provides the detailed rules for the operation of the DMTT. On September 1, 2024, Bahrain’s National Bureau for Revenue published Decree-Law No. (11) of 2024 for the introduction of a QDMTT. |
| Effective Date | Financial years beginning on or after January 1, 2025 |
| IIR | No |
| UTPR | No |
| QDMTT | Yes (2025) |
| Filing Deadlines | Standard |
| Safe Harbours | Transitional CbCR Safe Harbour, and the Simplified calculation Safe Harbour |
On July 2, 2025, Bahrain issued its Advance Payments Manual for details on the procedures for estimating and remitting advance DMTT liabilities.
On December 15, 2024, Bahrain issued Decision no. (172) of 2024 to provide for the Executive Regulations for the DMTT law. This provides the detailed rules for the operation of the DMTT.
On September 1, 2024, Bahrain’s National Bureau for Revenue published Decree-Law No. (11) of 2024 for the introduction of a QDMTT.
This was approved by the Shura Council on May 11, 2025.
OVERVIEW
On September 1, 2024, Bahrain’s National Bureau for Revenue published Decree-Law No. (11) of 2024 (‘the law’) for the introduction of a domestic minimum top up tax (DMTT) (intended to be a Qualified Domestic Minimum Top-Up Tax (QDMTT)). The law is required to be published in the Official Gazette and is subject to Executive Regulations.
On December 15, 2024, Bahrain issued Decision no. (172) of 2024 to provide for the Executive Regulations for the DMTT law. This provides the detailed rules for the operation of the DMTT.
Article 44 of the law provides that the QDMTT is effective from January 1, 2025.
GLOBE APPLICATION
General
The law is very high-level and although it provides for the DMTT to be calculated based on the OECD Model Rules, the detailed application of the rules is provided in the Executive Regulations.
The Executive Regulations include:
-Excluded Entities
-Entity Location, including Constituent Entities that are located in more than one jurisdiction and the change of a Constituent Entity’s location within a fiscal year
-GloBE Income Adjustments
-Adjusted Covered Taxes Adjustments
-ETR Calculation and Top-Up Tax Computation, including the computation of the ETR for minority-owned Constituent Entities, multi-parented Multinational Enterprise Groups, investment entities and insurance investment entities
-Substance-Based Income Exclusion
-Joint-Ventures
-De-Minimis Exclusion
-Transitional CbCR Safe Harbour, including the requirements for the financial statements of Joint Ventures and Joint Venture Subsidiaries
-Exclusion for the Initial Phase of International Activity
-Corporate Restructuring and Transfer of Assets and Holding Structures, including the transfer of assets and liabilities, restructuring, a Constituent Entity joining, merging, and leaving a Multinational Enterprise Group, and the rules related to a multi-parented Multinational Enterprise Group
-Financial Statements, including what constitutes a material competitive distortion
-Currency Rules
-Administrative Provisions, including Registration, Filing and Payment Obligations
The Regulations also include a detailed definition of a permanent establishment, as well as the determination of the arm’s length price for transfer pricing purposes and the requirement for a local and master file.
The provisions for Distribution Tax Regimes in the OECD Model GloBE Rules are not included in the law/regulations as this is not relevant for Bahrain’s domestic tax system.
Administrative Guidance
The only aspects of the OECD Administrative Guidance (AG) included in the law are:
AG1
-Consolidated deferred tax amounts (exclusion of the State from the definition of entity) (Article 1.3)
-Sovereign wealth funds and the definition of Ultimate Parent Entity (Article 1.4)
AG3
-Transitional CbCR – Treatment of hybrid arbitrage arrangements (Article 2.6)
-NMCE Simplified Calculations (Article 6)
Executive Regulations
However, the Executive Regulations include a number of additional aspects, including:
-Rebasing monetary thresholds in the GloBE Rules (Section 1.1 AG1);
-Forex hedge election (Section 2.2 AG1);
-Excluded Dividends – Asymmetric treatment of dividends and distributions (Section 2.3 AG1);
-Debt Release Election (Section 2.4 AG1);
-Accrued Pension Expenses (Section 2.5 AG1);
-Excess Negative Tax Carry-forward guidance (Section 2.7 AG1);
-Equity Gain or loss inclusion election Section 2.9 AG1;
-The extension of the taxable distribution method election to insurance investment entities (Section 3.1 AG1);
-Restricted Tier One Capital (Section 3.3 AG1);
-Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders (Section 3.4 AG1);
-Portfolio shareholding election (Section 3.5 AG1);
-Deferred tax transition rules (Sections 4.1-4.3 AG1);
-MTTCs (Second Set of OECD Administrative Guidance);
-Additional rules (such as the deemed 50% requirement where employees perform work outside the employer’s jurisdiction for the SBIE) (Second Set of OECD Administrative Guidance).
The Executive Regulations also include aspects of the June 2024 OECD Administrative Guidance, including:
-Recalculated deferred tax where GloBE carrying value differs from accounting carrying value (Section 2.1.2 AG4)
-Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity (Section 5.2.2 AG4)
Certain aspects of the OECD Administrative Guidance are not included (eg Substitute Loss carry-forwards and the allocation of taxes arising under Blended CFC Tax Regimes).
Safe Harbour and Penalty Relief Guidance
The law includes provisions for:
-The Transitional CbCR Safe Harbour (Article 13);
-Simplified Calculation Safe Harbour (Article 14)
Whilst the law includes the main aspects of the Transitional CbCR Safe Harbour from the OECD Safe Harbours and Penalty Relief Guidance, it does not include the amendments made in the December 2023 OECD Administrative Guidance (aside from the rule for Hybrid Mismatches after December 15, 2022 which is provided in Article 13B of the law).
The Regulations provide the detailed rules for the provisions of this Safe Harbour, including the requirements for the financial statements of Joint Ventures and Joint Venture Subsidiaries, in addition to other necessary related matters in a manner consistent with the OECD Model Rules, Administrative Guidance, and Commentary.
The only aspect of the December 2023 OECD Administrative Guidance included in the Regulations is the provision for MNEs not required to file CbC Reports (Article 90L of the Executive Regulations).
Article 56 of the Executive Regulations provides that Ministerial decision will be issued for the detailed rules of the Simplified Computation Safe Harbour.
ELECTIONS
Elections in the OECD Model Rules
The only elections included in the OECD Model Rules provided in the law, are:
-Excluded Entity Election (Article 4(B) of the law)
-Substance-Based Income Exclusion Election (Article 9(C) of the law)
The Executive Regulations include the other elections, including:
-Stock-Based Compensation Election (Article 14 of the Executive Regulations);
-Election to use the Realization Method (Article 16 of the Executive Regulations);
-Election to Spread Capital Gains (Article 17 of the Executive Regulations);
-Consolidation Election (Article 24 of the Executive Regulations);
-Unclaimed Accrual Election (Article 33G of the Executive Regulations);
-GloBE Loss Election (Article 35 of the Executive Regulations);
-Prior Year Adjustment Election (Article 36C of the Executive Regulations);
-De minimis Election (Article 54F of the Executive Regulations);
-Taxable Distribution Election (Article 61 of the Executive Regulations);
-Tax Transparency Election (Article 60 of the Executive Regulations);
The Distribution Tax Regime Election is not included in the Law or Regulations.
Elections in the Administrative Guidance
The Executive Regulations include the various elections included in the OECD Administrative Guidance, including:
-Foreign Exchange Hedge Election (Article 15 of the Executive Regulations);
-Portfolio Shareholding Election (Article 20 of the Executive Regulations);
-Equity Investment Inclusion Election (Article 21 of the Executive Regulations);
-Debt Release Election (Article 19 of the Executive Regulations);
-Excess Negative Tax Carry-Forward Election (Article 52 of the Executive Regulations).
DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE
The law implements a DMTT which under the OECD rules does permit various variations from the OECD Model Rules (see ‘Domestic Minimum Tax’ below).
The Regulations include additional provisions including a detailed definition of a permanent establishment, as well as the determination of the arm’s length price for transfer pricing purposes and the requirement for a local and master file.
The provisions for Distribution Tax Regimes in the OECD Model GloBE Rules are not included in the law/regulations as this is not relevant for Bahrain’s domestic tax system.
Article 17C of the law does provide that the Tax Authority may require any Excluded Entity to register for Tax purposes (ie even if they are not themselves subject to top-up tax obligations).
DOMESTIC MINIMUM TAX
General
The law provides for a QDMTT (or at least a domestic minimum tax that is likely to be classed as a QDMTT).
QDMTT Design Features
The law does not simply transpose the OECD Model Rules, but instead redrafts the rules for the purposes of the domestic minimum tax.
Specific QDMTT design aspects included in the law include:
Accounting Standard
Article 6(B) of the law provides that the Financial Accounting Net Income or Loss (FANIL) is determined based on the Local Financial Accounting Standard of the Constituent Entity.
Article 8 of the Executive Regulations provides further detail on this and states a Constituent Entity’s FANILis determined based on financial accounts prepared in accordance with a Local Financial Accounting Standard where all of the following conditions are met:
1. All of the Constituent Entities located in Bahrain that are members of the same MNE Group have financial accounts prepared in accordance with the Local Financial Accounting Standard.
2. The accounting period of all such accounts is the same as the fiscal year of the Consolidated Financial Statements of the MNE Group or Joint Venture Group.
3. Either all Constituent Entities are required to prepare or use local financial accounts for the purposes of determining their liability to taxes in Bahrain or to comply with any other law of Bahrain, or the financial accounts are subject to an external audit.
Where any of the Constituent Entities located in Bahrain that are members of the same MNE Group do not prepare financial accounts which meet all of the above requirements, the Constituent Entity Income or Loss is determined based on the net income or loss for the fiscal year determined for the Constituent Entity (before any consolidation adjustments aimed at eliminating intra-group transactions), which has been used in preparing Consolidated Financial Statements of the UPE.
Where this is not reasonably practicable, the FANIL of the Constituent Entity may be determined using another Acceptable Financial Accounting Standard or Authorised Financial Accounting Standard provided that all of the following conditions apply:
1. The financial accounts of the Constituent Entity are prepared based on that accounting standard.
2. The information contained in the financial accounts is reliable.
3. Permanent differences greater than EUR 1 million that arise from the application of the other Acceptable Financial Accounting Standard or Authorised Financial Accounting Standard are conformed to the treatment which would have applied under the financial accounting standard used in the preparation of the Consolidated Financial Statements of the UPE.
Initial Phase of International Activity Exemption
The exclusion for MNEs in their initial phase of international activity does not need to be included in a QDMTT, however, it can be included. The Second Set of OECD Administrative Guidance provides jurisdictions with three options regarding the temporary exclusion in their QDMTT legislation.
Option one allows the jurisdiction not to adopt it.
Option two allows the jurisdiction to adopt it but limits it to cases where no Parent Entity is required to apply a Qualified Income Inclusion Rule with respect to Constituent Entities of an MNE Group located in the QDMTT jurisdiction.
Option three allows the jurisdiction to adopt it without any limitations. (Note, if a jurisdiction opts for Option three, for the purposes of the QDMTT Safe Harbour the Switch-Over Rule would apply).
Bahrain applies Option two under Article 15 of the law.
Currency
The OECD Administrative Guidance provides for a number of rules for currency for DMTT purposes. Bahrain adopts these in Article 72 of the Executive Regulations.
Where all of the Constituent Entities of a Multinational Enterprise Group that are located in Bahrain use the Bahraini Dinar as their Presentation Currency, the Bahraini Dinar is used for DMTT purposes.
Where one or more of the Constituent Entities of a Multinational Enterprise Group that are located in Bahrain do not use Bahraini Dinar as their Presentation Currency, the Filing Constituent Entity can make an election to use either the Bahraini Dinar or the Presentation Currency of the Consolidated Financial Statements of the UPE.
GAAR
Article 41 of the law includes a General Anti-Abuse Rule so that an arrangement, or a series of arrangements carried out by an Entity, may be disregarded, or the top-up tax arising from an arrangement, or a series of arrangements that result in obtaining any Tax advantage may be based on just and reasonable adjustments.
Investment Entities
Article 8C of the law excludes Investment Entities from the jurisdictional ETR calculation. Article 42B of the Regulations also excludes Insurance Investment Entities.
Pushdown Limitation
Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This is included in Article 43 of the Executive Regulations.
Article 43 also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (aside from Bahrain withholding tax on distributions).
Registration
Article 17 of the law provides that the Filing Constituent Entity shall register with the Tax Authority in accordance with the rules prescribed by the Regulations. Article 62A of the Regulations requires registration no later than 120 days from the first day of the Transition Year. This is defined as the first fiscal year for which a Multinational Enterprise Group comes within the scope the DMTT, irrespective of whether it had been within scope in any fiscal year other than the immediately preceding fiscal year.
However, Article 62B of the Regulations provide that where the 750 Million Euro threshold is met for at least two of the four fiscal years immediately preceding January 1, 2025, a Filing Constituent Entity must register no later than 30 days from January 1, 2025.
The Tax Authority may also require any Excluded Entity to register for QDMTT purposes.
Article 18 of the law provides that the following Entities shall appoint one among them as the Filing Constituent Entity, which shall be responsible for paying the Tax and handling all tax administration matters, including registration, filing of returns, making elections, and submitting notifications:
-The Constituent Entities of a Multinational Enterprise Group that are located in Bahrain and who meet the 750 million euro revenue threshold
-A Joint Venture and its Joint Venture subsidiaries.
Filing
Article 21 of the law provides that a Filing Constituent Entity must submit a Tax Return to the Tax Authority for each fiscal year, through the form prescribed in the Regulations. Article 66A of the Regulations provides that this must be filed within 15 months from the last day of the Reporting fiscal year.
Article 66C-E of the Regulations provides that the Filing Constituent Entity must disclose the following information in its Tax Return:
1. A Tax Computation Schedule, which includes a self-assessment of Tax Due to the tax authority for the fiscal year.
2. An Information Schedule, which includes, where applicable, information related to Constituent Entities, Joint Ventures and Joint Venture Subsidiaries which are members of the Multinational Enterprise Group, and which may be located outside Bahrain.
3. Any other information specified by the tax authority.
A Filing Constituent Entity may submit a Tax Return solely comprising a Tax Computation Schedule if GloBE Information Return has been submitted by:
-The UPE of the MNE Group which is located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Bahrain for the Reporting fiscal year.
-A Constituent Entity of the MNE Group, other than the UPE, which is located in a jurisdiction that has a Qualifying Competent Authority Agreement in effect with Bahrain for the Reporting fiscal year.
Where this applies, the Tax Return submitted by a Filing Constituent Entity will include the identity and location of the entity which filed the information.
Article 66H of the Regulations provides for a simplified tax return (consistent with the OECDs Transitional Simplified Reporting Election), for fiscal years beginning on or before December 31, 2028, but not for any fiscal year that ends after June 30, 2030.
Payment
Article 22 of the law provides that the top-up tax due for the fiscal year shall be paid by advance payments during the fiscal year and one or more instalment payments during the fiscal year following that in respect of which Tax is due.
Article 70 of the Regulations states that advance payments are made in respect of each full three-month period or part of a three-month period during a fiscal year, except where the length of the fiscal year is shorter than three months, in which case no advance payments of tax is payable. Each advance payment is payable no later than 60 days after the end of each Advance Payment Period.
However, the first advance payment for a Transition Year that is the first fiscal year that begins on or after January 1, 2025 can be paid by the Filing Constituent Entity on the due date for the second advance payment for that year.
Article 70D provides that the Filing Constituent Entity can elect to calculate advance payments using the Prior Year Method or the Current Year Method.
Prior Year Method
The advance payment is determined in accordance with the formula:
((A ÷ B) x C), where:
A: A reasonable estimate of the tax for the prior fiscal year for Constituent Entities, Joint Ventures, and Joint Venture Subsidiaries of an MNE group located in the Bahrain.
For the purposes of the Transition Year, the reasonable estimate of the tax for those entities is computed as if they had fallen within the scope of the DMTT in the prior fiscal year.
B: The number of days in the prior fiscal year.
C: The number of days in the Advance Payment Period for which the relevant advance payment is due.
Current Year Method
The advance payment is be an amount determined in accordance with the formula:
(A – B), where:
A: A reasonable estimate of the tax that would be due if the period starting from the first day of the fiscal year and ending on the last day of the Advance Payment Period, had been a fiscal year for the purposes of the DMTT.
B: The sum of all advance payments already made, if any, for the fiscal year.
Penalties
Article 28 of the law provides for a number of penalties (subject to a cap of 100,000 Bahraini Dinars), including:
-Failure to submit the Tax Return or delaying its submission beyond the prescribed period, provided that the imposed fine does not exceed 30% of the Tax amount that should have been declared.
-Failure to pay the Tax or delaying its payment beyond the prescribed period, with a fine imposed at a rate of 1% of the unpaid Tax Due amount or the unpaid advance payment for each month
-Submitting incorrect data in the Tax Return that led to the computation of a Tax amount less than what is due, provided that the imposed fine does not exceed 30% of the Tax amount that should have been declared. The fine shall not exceed 20% of the Tax amount that should have been declared in the case of voluntary submission of the correct amended Tax Return.
-Submitting incorrect data in the Tax Return that does not result in underreporting the amount of Tax Due, the fine imposed shall not exceed one thousand Bahraini Dinars.
On July 2, 2025, Bahrain issued its Advance Payments Manual for details on the procedures for estimating and remitting advance DMTT liabilities.
On December 8, 2024, Bahrain updated its registration portal to include a form for QDMTT registration. The functionality can be accessed after logging into the NBR portal on the taxpayer home page.
| Bahrain | |||
|---|---|---|---|
| Effective Date: | Accounting periods beginning on or after January 1, 2025 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | 73, Regs | |
| 1.2 | Deemed consolidation test | 1(1)- Excludes State Entities | |
| 1.3 | Consolidated deferred tax amounts | ||
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | 1(1) | |
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | ||
| 1.6 | Meaning of ancillary for Non-Profit Organisations | ||
| 2.1 | Intra-group transactions accounted at cost | ||
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | 15, Regs | |
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | 22, Regs | |
| 2.4 | Debt release Election | 19, Regs | |
| 2.5 | Accrued Pension Expenses | 12K, Regs | |
| 2.6 | Covered Taxes on deemed distributions | ||
| 2.7 | Excess Negative Tax Carry-forward guidance | 52, Regs | |
| 2.8 | Substitute Loss carry forwards | ||
| 2.9 | Equity Gain or loss inclusion election | 21, Regs | |
| 2.9 | Qualified Ownership Interest/Flow through entity | 21, Regs | |
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | ||
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | 61, Regs | |
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | ||
| 3.3 | Restricted Tier 1 Capital | ||
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | 26E, Regs | |
| 3.5 | Simplification for Short-term Portfolio Shareholdings | 20, Regs | |
| 3.6 | Application of Tax transparency election to Mutual insurance companies | ||
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | 92, Regs | |
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | 92, Regs | |
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | 92, Regs | |
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | 72, Regs | |
| 2 | MTTCs | 1(19)/23 – Regs | |
| 3 | SBIE Rules | ||
| – Foreign rules | 47C/D/48 – Regs | ||
| Stock-based compensation election | |||
| Leases | 48, Regs | ||
| – Impairment losses inc in tangible asset value | |||
| 4.1 | QDMTT Safe Harbour | ||
| 4.2 | UTPR Safe Harbour | ||
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | ||
| 2.2.1 | Transitional CbCR – JVs | ||
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | ||
| 2.3.2 | Transitional CbCR – Using different accounting standards | ||
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | ||
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | 90L, Regs | |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | ||
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | 13B Law |
|
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | ||
| 4.2.2 | Blended CFCs – not required to calculate an ETR | ||
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | ||
| 5.3 | 30 June 2026 Filing deadline | ||
| 6 | NMCE Simplified Calcs | 14 |
|
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | ||
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | ||
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | ||
| 1.2.1 | Exclusion of swinging accounts and separate tracking | ||
| 1.2.2 | FIFO/LIFO Basis | ||
| 1.2.3 | Aggregation of Short-term DTLs | ||
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | ||
| 1.2.2 | 5 year unclaimed accrual election | ||
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | 34, Regs | |
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | ||
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | ||
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | ||
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | 11e, Regs | |
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | ||
| 5.3.5 | Non-group owners: Indirect minority ownership | ||
| 5.4.2 | Taxes allocated to a flow-through entity | ||
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | ||
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | ||
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | ||
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
| Note | Bahrain | |
|---|---|---|
| QDMTT?(Enacted/Draft) | Is there a QDMTT in the Legislation? | Yes – Enacted |
| Effective Date: | Fiscal years beginning on or after January 1, 2024 | |
| Administrative Guidance/Safe Harbour Guidance? | Are the provisions of the OECD Administrative Guidance and Safe Harbour Guidance reflected in the current legislation? | Yes |
| Separate/Transposed QDMTT | Is the QDMTT a Separate QDMTT or a Transposition of the GloBE Rules (with Amendments) | Separate |
| Domestic Groups | A QDMTT can also apply to purely domestic groups. | No |
| Scope Definitions | The definitions of Ultimate Parent Entity, MNE Group, and Constituent Entity correspond with the definitions in the GloBE Rules. | Chapters 1 and 2 – Regs |
| Income and covered taxes of Constituent Entities | The QDMTT must compute the tax liability for the jurisdiction by taking into account the income and covered taxes of Constituent Entities under the GloBE Rules. | Chapter 4 – Regs |
| Separate ETRs | A QDMTT must determine a separate ETR and Top-up Tax amount for MOCEs, Joint Ventures and JV Subsidiaries. | Yes |
| Charging | A QDMTT must impose a Top-up Tax on one or more domestic Constituent Entities on the Excess Profits of all domestic Constituent Entities, including the domestic Parent Entity. | Yes – 8, 9, 11 |
| Enforceability | The legal liability for the domestic top-up tax needs to be enforceable against at least one Constituent Entity in the jurisdiction. | Yes – 18 |
| Different Accounting Standard? – Optional | Is the use of a local accounting standard optional? | Yes – local standard, 6 |
| Different Accounting Standard? – Mandatory | Is the AG2 guidance followed? | No |
| Different Accounting Standard? – Default GloBE rules | Do the general GloBE rules apply for the QDMTT accounting standard? | No |
| Require 100% ownership? | The QDMTT )can require 100% ownership | No |
| Differences to GloBE Rules: tighter restriction is consistent with local tax rules | The QDMTT can be more restrictive than the GloBE Rules where the tighter restriction is consistent with local tax rules. | None |
| Differences to GloBE Rules: Not relevant to in the context of its domestic tax system | The QDMTT can exclude adjustments that are not relevant to in the context of its domestic tax system. | Yes (no distribution tax election or UPE deductible dividend regime) |
| Income/Loss of a PE | The QDMTT must exclude the income or loss of a foreign Permanent Establishment from the income or loss of the Main Entity. | Yes – Article 4 – Regs |
| Tax Transparency | A QDMTT must include certain tax transparent provisions. | Yes – Regs – Various |
| Adjusted Covered Taxes Consistency | The range of taxes included in Covered Taxes needs to be the same or narrower, as under the GloBE rules. | Yes – Chapter 4 – Regs |
| GloBE Loss Election? | Not Required in QDMTT | Yes – Art 35 – Regs |
| No Pushdown to CFC or PE | A QDMTT must exclude: (1) tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules and (2) tax paid or incurred by a Main Entity that is allocated to a PE in the jurisdiction. | Yes – Art 43 – Regs |
| Exclude tax allocated to Hybrids | Second AG Guidance | Yes – Art 43 – Regs |
| Exclude allocated net basis tax on dividends (except WHT) | Second AG Guidance | Yes – Art 43 – Regs |
| UPE that is a Flow-Through Entity | Second AG Guidance | Yes – Art 58 – Regs |
| UPE subject to Deductible Dividend Regime | Second AG Guidance | No |
| Eligible Distribution Tax Systems | Second AG Guidance | No |
| ETR Computation for Investment Entities | Second AG Guidance | Yes – Art 59 – Regs |
| Investment Entity Tax Transparency Election | Second AG Guidance | Yes – Art 60 – Regs |
| Taxable Distribution Method Election | Second AG Guidance | Yes – Art 61 – Regs |
| Multi-Parented MNE Groups | Second AG Guidance | Yes – Art 41 – Regs |
| Additional Top-Up Tax/Excess Negative Tax Expense | A QDMTT needs to have provisions for additional top-up tax where there is no Net GloBE Income and the Adjusted Covered are less than zero and less than the Expected Adjusted Covered Taxes. Amount. Excess Negative Tax Carry-forward rules also need to be in place. | Yes – Arts 51/52 – Regs |
| Modified Top-Up Tax Formula | The QDMTT top-up tax formula needs to be modified as the GloBE Rules subtract tax paid under a QDMTT from the current GloBE Top-up Tax. | Yes, 8/9 |
| Same Approach As GloBE Rules | A QDMTT must require that top-up tax is taken into account by the relevant Constituent Entity at the same time and in the same manner as under the GloBE Rules (eg it can’t be carried forward). | Yes – 8/9 |
| SBIE Included? | Not Required in QDMTT | Yes – 10 |
| SBIE Rates same as GloBE? | Not Required in QDMTT | Yes – 10 |
| De Minimis Rule Included? | Not Required in QDMTT | Yes – 12 |
| Restructuring Rules? | A QDMTT needs to include restructuring rules as provided in the GloBE rules to the extent necessary to conform to the tax reorganization rules in the jurisdiction. | Yes – Chapter 5 – Regs |
| Safe Harbours? | A QDMTT needs to contain GloBE safe harbours. | Transitional CbCr and Simplified Calculations |
| Deferred Tax Transition Rule? | A QDMTT must include the deferred tax starting point under Article 9.1.1 of the Model Rules. | Yes – 42 |
| SBIE Transitional Rates? | Not Required in QDMTT | Yes – 10 |
| Initial Phase of International Activity Exemption | Not Required in QDMTT | Yes – 15 |
| Elections? | Where the GloBE Rules permit an election, a QDMTT must generally also provide for the election and require the MNE Group to make the same election under the QDMTT as is made under the GloBE Rules. | Yes – all |
| Deferred Tax transition: First time or refreshing rule? | Second AG | No |
| New transition year – amend tax attributes? | Second AG | No |
| Currency provisions? | Second AG | Yes – Art 72 – Regs |
| DTL Recapture rules – Aggregate DTL Categories | Fourth AG, 1.2.8 | No |
| DTL Recapture rules Unclaimed Accrual Five-Year Election | Fourth AG, 1.2.8 | No |
| Reverse Hybrid Pushdown | Fourth AG, 5.6.2 | No |
| Securitization Entities – A QDMTT may also exclude a Securitisation Entity from its scope | Fourth AG, 6.1.4 | No |
| Securitization Entities – A jurisdiction may allocate the QDMTT liability for any QDMTT top-up tax to another Constituent Entity (if any) that is located in the jurisdiction | Fourth AG, 6.1.4 | No |
| Note |
| Bahrain | ||
|---|---|---|
| Effective Date: | Fiscal years beginning on or after January 1, 2025 | |
| Section/Article | ||
| Safe Harbour & Penalty Relief Guidance | De Minimis Test | 13A |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR Test | 13A |
| Safe Harbour & Penalty Relief Guidance | Routine Profits Test | 13A |
| Safe Harbour & Penalty Relief Guidance | Simplified Covered Tax defn (inc exclusion of uncertain tax positions) | 90A – Regs |
| Safe Harbour & Penalty Relief Guidance | Simplified ETR defn | 90B – Regs |
| Safe Harbour & Penalty Relief Guidance | Transition Period | 13A |
| Safe Harbour & Penalty Relief Guidance | Transition Rate | 13A |
| Safe Harbour & Penalty Relief Guidance | Defn of Qualified Financial Statements | 90A – Regs |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Joint Ventures | 13C |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Tax Neutral UPEs | 90G/H – Regs |
| Safe Harbour & Penalty Relief Guidance | Special Rules for Investment Entities and their Constituent Entity-owners | 90I/J – Regs |
| Safe Harbour & Penalty Relief Guidance | Special Rule for Net Unrealised Fair Value Loss | 90C – Regs |
| Safe Harbour & Penalty Relief Guidance | Exclusions | Yes |
| December 2023 OECD Administrative Guidance | ||
| 1 | Transitional CbCR – Purchase Accounting Adjustments(consistent reporting condition, goodwill impairment adjustment) | – |
| 2.2.1 | Transitional CbCR – JVs | – |
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | – |
| 2.3.2 | Transitional CbCR – Using different accounting standards | – |
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | – |
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | 90L, Regs |
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | – |
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | – |
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | 13B |
| January 2025 OECD Administrtive Guidance | ||
| Amendments to CbCR Safe Harbour for 9.1 |
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