Comprehensive guidance on Bahrain's Transfer Pricing landscape, focusing on CbC Reporting and the evolving regulatory framework under the National Bureau for Revenue (NBR).
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Bahrain, as a member of the OECD Inclusive Framework on BEPS, has committed to international tax transparency standards. Currently, the primary focus in Bahrain is on Country-by-Country Reporting (CbCR) for large multinational enterprises (MNEs).
While comprehensive local TP bylaws are evolving, the National Bureau for Revenue (NBR) emphasizes the importance of the Arm's Length Principle for all cross-border transactions to ensure fair tax practices within the Kingdom.
Bahrain follows the OECD Minimum Standards, specifically focusing on transparency and reporting for MNE groups.
NBR expects related party transactions to be conducted as if they were between independent third parties.
Automatic Exchange of Information ensures that Bahrain shares financial data with global tax jurisdictions.
Standardized information relevant to all MNE group members.
Under OECD standards, the Master File provides a high-level overview of the MNE group's global business operations and transfer pricing policies.
In Bahrain, while not yet a mandatory annual local filing for all, it is highly recommended to maintain this for audit readiness and consistency with global reporting.
Detailed information regarding specific local entity transactions.
The Local File complements the Master File by providing a detailed analysis of related party transactions specifically involving the Bahraini entity.
This includes functional analysis (FAR), selection of TP methods, and benchmarking studies to justify the transfer prices applied.
Mandatory for groups with revenue exceeding BHD 342 Million.
In line with Ministerial Resolution No. 28 of 2021, MNE groups headquartered in Bahrain with consolidated revenues exceeding BHD 342 million must file a CbC Report.
Notifications: All constituent entities in Bahrain must submit a CbCR notification via the AEOI portal by the end of the financial year.
Filing: The CbC report itself is due within 12 months from the end of the MNE group's reporting financial year.
AEOI Portal notifications and report preparation.
Review of existing intercompany agreements.
Master and Local File proactive development.
Aligning Bahrain operations with international OECD rules.
Reach out to our experts to ensure your Bahraini operations are fully compliant with CbCR and OECD standards.
Contact ExpertsFor further information on transfer pricing please contact:
Leader - Gulf Practice
Leader - Global TP
Leader - TP Policy
TP Specialist – Gulf Region