GTL Summary:

Article 14 introduces the Simplified Computation Safe Harbour, providing three scenarios where the Domestic Minimum Top-Up Tax for Bahrain-based entities shall be zero. First, if the simplified Constituent Entity Income is below the Substance-based Income Exclusion. Second, if the average annual revenue is under EUR 10 million and average income is under EUR 1 million (or a net loss) over a three-year period. Third, if the Effective Tax Rate meets or exceeds the 15% Minimum Rate. The National Bureau for Revenue will prescribe the specific simplified computation methods via Regulations, ensuring compliance remains manageable and aligned with OECD Pillar Two administrative guidance.

Document Type: Tax Law Article
Law: DMTT Law (Decree Law No. 11 of 2024)
Article Number: 14
Country: 🇧🇭 Bahrain
Location: Chapter 3 - Effective Tax Rate and Safe Harbour
Order: 14
Last updated at: 2026-02-23 12:13:40 UTC

Chapter 3 - Effective Tax Rate and Safe Harbour

Article 14 - Simplified Computation Safe Harbor

  1. The Tax for Constituent Entities located in the Kingdom for a Fiscal Year shall be equal to zero in any of the following cases:

    1. The Constituent Entity Income, as determined under a simplified computation, is equal to or less than the Substance-based Income Exclusion for that Fiscal Year.

    2. The average annual revenue for all Constituent Entities located in the Kingdom for the Fiscal Year and two preceding Fiscal Years, as determined by a simplified computation, is less than ten million Euro (EUR 10 million), and the average Constituent Entity Income of all such Entities is less than one million Euro (EUR 1 million) for the current and two preceding Fiscal Years, or if such entities have a Net Constituent Entity Loss.

    3. If the Effective Tax Rate of all Constituent Entities located in the Kingdom is at least the Minimum Rate.

  2. The Regulations shall prescribe the rules, conditions, and controls necessary for the application of the provisions of this Article, including the simplified computation method and other matters in a manner consistent with the Model Rules, administrative guidance, and commentary issued by the Organisation for Economic Co-operation and Development (OECD).

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Article 13 - Transitional Country-by-Country Reporting Safe Harbor
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