No Corporate Income Tax (General)
Written in plain language for general understanding. This is educational content, not legal advice. Based on Bahraini national legislation, decree-laws, and ministerial orders.
Bahraini National Law
What is this right?
Bahrain does not levy corporate income tax on most businesses:
- No general corporate tax: Companies operating in Bahrain are not subject to corporate income tax on their profits, with one exception.
- Oil companies: Companies engaged in the exploration and production of oil and gas in Bahrain are taxed at 46% on their profits from petroleum operations.
- No dividend tax: Dividends distributed to shareholders are not taxed.
- Municipal fees: Commercial establishments pay a 10% municipal fee on the rental value of their premises (this is not an income tax).
- Global minimum tax: Bahrain is monitoring OECD Pillar Two developments, which may require large multinationals (revenue over EUR 750 million) to pay a minimum 15% effective tax rate.
When does it apply?
- You own or operate a business in Bahrain.
- You are considering setting up a company in Bahrain.
- Your company is in the oil and gas sector (46% tax applies).
What should you do?
- Confirm your sector — if you are not in oil/gas, you generally have no corporate income tax liability.
- Budget for municipal fees and other non-tax charges that still apply.
- Stay informed about OECD Pillar Two if your group has global revenue exceeding EUR 750 million.
- Ensure you are compliant with VAT if applicable — this is separate from corporate tax.
What should you NOT do?
- Do not assume zero tax means zero compliance — businesses still have VAT, SIO, LMRA, and commercial registration obligations.
- Do not overlook the oil sector exception — petroleum companies face a 46% tax rate.
- Do not ignore upcoming international tax changes — the OECD global minimum tax may apply to large multinationals.
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