Corporate Tax · Bahrain
Corporate tax is coming to Bahrain. Get ready on your terms.
Bahrain has proposed a 10% corporate income tax, expected from 2027. For a market that has long been largely tax-free, this is a significant shift. SRR helps businesses understand the impact early and prepare, so compliance is straightforward when the rules take effect.
The proposal at a glance
What is being introduced.
- Proposed rate
- 10%
- A 10% corporate income tax is proposed on taxable income above the threshold, with 0% applying up to it.
- Tax-free threshold
- BHD 200,000
- Taxable income up to BHD 200,000 is proposed to be taxed at 0%, with 10% applying above that level.
- Expected from
- 2027
- The tax is expected to take effect for fiscal years beginning on or after 1 January 2027, subject to the final law.
These figures are based on the draft law referred to Bahrain's legislative authorities in late 2025. The final law and its regulations are still to be confirmed, and the position should be checked against them.
How We Help
From understanding the impact to filing the first return.
Corporate tax readiness is not a single task. We work through the impact, the numbers, and the systems, so the transition is managed rather than rushed.
- Corporate tax impact assessment for your business
- Taxable income and effective tax rate modelling
- Group and DMTT interaction review for multinationals
- Registration and filing readiness
- Accounting systems and record-keeping alignment for CIT
- Ongoing corporate tax compliance once the law is in force
How It Works
A clear path to corporate tax readiness.
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Assess your exposure
We review your structure, activities, and numbers to see whether and how the proposed corporate tax would apply to your business.
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Model the impact
We estimate your taxable income and effective rate, including how the tax would interact with the DMTT for groups already in its scope.
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Get ready
We align your records, systems, and processes so that registration and filing are straightforward when the rules take effect.
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Stay compliant
Once corporate tax is in force, we handle registration, returns, and the ongoing obligations, with the same team that knows your business.
Common Questions
Corporate tax in Bahrain, answered.
Is there corporate tax in Bahrain now?
Bahrain has no general corporate income tax at present. A 46% tax applies to oil and gas activities, and a Domestic Minimum Top-up Tax (DMTT) has applied to large multinational groups since 1 January 2025. Beyond these, a broad-based 10% corporate income tax is proposed and expected from 2027.
What is the proposed rate and threshold?
The draft law proposes a 10% corporate income tax on taxable income exceeding BHD 200,000, with a 0% rate applying to taxable income up to that threshold. The detailed rules will be set out in the final law and its regulations.
When is corporate tax expected to take effect?
It is expected to apply for fiscal years beginning on or after 1 January 2027. The law was referred to the legislative authorities in late 2025 and remains draft, so the timing and detail should be confirmed against the final law.
Which businesses will it apply to?
As proposed, it would apply to companies and individuals carrying on business activities in Bahrain, and to non-residents operating through a permanent establishment. Passive investment income is not expected to be treated as taxable income, and oil and gas activities remain under their own regime.
How does corporate tax interact with the DMTT?
The DMTT already applies to multinational groups with consolidated revenue above 750 million euros, ensuring a 15% minimum effective rate. For groups in scope, corporate tax is expected to be calculated first, with the DMTT applying on top only where the effective rate remains below the 15% minimum.
Should we wait until the law is final before doing anything?
Waiting is the more expensive option. Understanding your exposure now, and getting records and systems ready, means registration and filing are straightforward when the rules take effect, rather than a rushed exercise later.
Part of our wider accounting and compliance services in Bahrain and the GCC. For groups already in scope of the global minimum tax, see our note on the Bahrain DMTT computations guide.
Get ahead of corporate tax in Bahrain.
A short call is the quickest way to understand how the proposed corporate tax would affect your business and what to do now.