Bahrain’s Ministry of Finance and National Economy has introduced a fee structure for tax appeals relating to the country’s domestic minimum top-up tax and the tax authorities (National Bureau of Revenue (NBR)) have produced a useful administrative guide on the minimum tax rules. Bahrain’s Pillar Two rules became effective on 1 January 2025 (for prior coverage, see the article in the November 2024 issue of Corporate Tax News).
A fee of BHD 50 will be imposed where a taxpayer submits a review request to the NBR regarding decisions affecting the domestic minimum top-up tax. The fee for filing a formal appeal to the Tax Appeals Committee is BHD 100. These fees are levied per decision or procedural matter, irrespective of whether multiple issues are consolidated within a single submission.
The NBR released the first edition of the DMTT administrative guide in May 2025, which addresses operational, procedural and compliance obligations for in-scope multinational enterprise (MNE) groups. Key provisions in the guide include:
The new fee structure is part of Bahrain’s commitment to creating a robust tax dispute resolution mechanism, fostering procedural discipline and aligning with international standards of fiscal governance and transparency. The NBR’s guidance provides strategic and operational benefits for affected MNE groups by clarifying provisions and compliance obligations.
Asrujit Mandal
BDO in Bahrain
Tax Appeal Fees
A fee of BHD 50 will be imposed where a taxpayer submits a review request to the NBR regarding decisions affecting the domestic minimum top-up tax. The fee for filing a formal appeal to the Tax Appeals Committee is BHD 100. These fees are levied per decision or procedural matter, irrespective of whether multiple issues are consolidated within a single submission.
Administrative Guide
The NBR released the first edition of the DMTT administrative guide in May 2025, which addresses operational, procedural and compliance obligations for in-scope multinational enterprise (MNE) groups. Key provisions in the guide include:
- Designation of a filing constituent entity domiciled in Bahrain, which must be completed within 120 days from the commencement of the relevant fiscal year.
- Quarterly advance tax payments are required, calculated on either current-year projections or prior-year actuals.
- Detailed guidance on annual and multiyear elections, including foreign exchange treatment, deferred tax adjustments and loss carryforwards, all of which have significant implications for computation of the effective tax rate.
- All DMTT liabilities must be assessed and settled in Bahraini Dinars, irrespective of the MNE group’s functional or reporting currency. Emphasis is placed on audit preparedness, requiring comprehensive documentation, rigorous recordkeeping and the establishment of robust internal control frameworks.
Scope and Revenue Implications of the DMTT
The Ministry of Finance has projected that approximately 300 MNE groups will be subject to the DMTT regime, with an anticipated annual revenue yield of BHD 130 million.
BDO Takeaway
The new fee structure is part of Bahrain’s commitment to creating a robust tax dispute resolution mechanism, fostering procedural discipline and aligning with international standards of fiscal governance and transparency. The NBR’s guidance provides strategic and operational benefits for affected MNE groups by clarifying provisions and compliance obligations.Asrujit Mandal
BDO in Bahrain