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Bahrain Corporate Tax Guide 2026

Bahrain applies a standard 0% corporate income tax. Only oil and gas upstream and exploration companies pay 46%. No CFC rules, thin capitalization limits, or transfer pricing legislation exist yet.

Standard Corporate Tax Rate

0% — Most companies operating in Bahrain pay zero corporate income tax. This includes trading, services, manufacturing, technology, financial services, and holding companies.

Oil & Gas Sector — 46%

Companies engaged in oil and gas upstream activities and exploration are subject to a 46% tax rate under Bahrain's Oil and Gas Tax Decree. Downstream, refining, and petrochemicals are generally taxed at 0% unless they fall under specific concession agreements.

No CFC Rules

Bahrain has no controlled foreign company (CFC) legislation. Bahrain-resident companies are not attributed income from foreign subsidiaries.

No Thin Capitalization

There are no thin capitalization rules. Companies may deduct interest without restriction, subject to general commercial substance requirements.

No Transfer Pricing Law

Bahrain has not yet enacted transfer pricing legislation. However, the NBR may challenge pricing arrangements under general anti-avoidance principles. It is advisable to maintain arm's-length documentation in preparation for expected future TP rules.

Corporate Tax Filing

Since standard corporate tax is 0%, most companies have no CIT filing obligation. Oil & gas companies subject to 46% must file annual returns with the NBR. All companies registered for VAT file quarterly VAT returns.

Golden License

Strategic investors can obtain a 10-year renewable golden license with streamlined company setup, visa processing, and land allocation — while retaining the 0% corporate tax benefit.

Key Corporate Tax Facts

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