GTL Summary:

Article 20 distinguishes between 'Annual Elections' and 'Five-Year Elections' that a Filing Constituent Entity can make regarding its tax obligations. An Annual Election applies strictly to a single fiscal year, whereas a Five-Year Election remains in effect for at least five consecutive years and cannot be revoked during that period. If a Five-Year Election is eventually revoked, the entity is barred from making a new election for the following four years. These elections, which must be notified to the Bureau, allow MNEs to choose specific tax treatments, such as safe harbours, in accordance with the OECD Pillar Two administrative framework.

Document Type: Tax Law Article
Law: DMTT Law (Decree Law No. 11 of 2024)
Article Number: 20
Country: 🇧🇭 Bahrain
Location: Chapter 4 - Tax Procedures and Obligations
Order: 20
Last updated at: 2026-02-23 12:13:40 UTC

Chapter 4 - Tax Procedures and Obligations

Article 20 - Elections

  1. An Annual Election or a Five-Year Election means an election made by a Filing Constituent Entity and is notified to the Bureau with respect to a Constituent Entity or a Joint Venture or a Joint Venture Subsidiary.

  2. A Five-Year Election is an election made by a Filing Constituent Entity and is notified to the Bureau in relation to a Fiscal Year (the election year) and all succeeding Fiscal Years until revoked by a Filing Constituent Entity.

  3. A Five-Year Election shall remain in place for a minimum of five consecutive Fiscal Years and may not be revoked for any one or part of those five Fiscal Years. If a Five-Year Election is revoked with respect to a Fiscal Year, a new election shall not be made with respect to the four Fiscal Years succeeding the revocation year.

  4. An Annual Election shall apply only for the Fiscal Year for which the election is made.

  5. The Regulations shall prescribe the rules, procedures and controls for making elections, 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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