Who this is for
- Bahrain companies approaching or above the VAT registration threshold
- Groups with UAE and Bahrain entities that want consistent bookkeeping across both
- Subsidiaries of multinational groups assessing their DMTT position
- Owners who want to understand how the proposed Bahrain corporate income tax could affect them
What Scaleon helps with
- Assessing whether VAT registration is mandatory or voluntary for your turnover
- Preparing VAT registration information and coordinating the NBR application
- Preparing VAT return working papers for monthly or quarterly periods
- Monthly or quarterly bookkeeping and management accounts
- Preparing records and schedules for your MOIC-licensed external auditor
- Reviewing the corporate tax position, including DMTT scope for large groups
- Tracking CR renewal, VAT and financial statement deadlines
VAT in Bahrain
VAT was introduced in Bahrain on 1 January 2019, and the standard rate has been 10% since 1 January 2022. Some supplies are zero-rated and others are exempt. The NBR is responsible for implementing and collecting VAT.
Businesses must register when the value of their taxable supplies exceeds the mandatory threshold of BHD 37,500. Voluntary registration is available above BHD 18,750, and a voluntary registrant must generally remain registered for at least two years.
| Item | Position per NBR guidance |
|---|---|
| Standard rate | 10% (from 1 January 2022) |
| Mandatory registration | Taxable supplies above BHD 37,500 |
| Voluntary registration | Taxable supplies above BHD 18,750 |
| Monthly returns | Annual taxable supplies above BHD 3 million |
| Quarterly returns | Annual taxable supplies of BHD 3 million or less |
| Filing deadline | Last day of the month after the end of the VAT period |
Bookkeeping and financial statements
Accurate books support VAT returns, bank reviews and the annual financial statements. MOIC guidance requires many company types, including WLLs and foreign branches, to submit audited annual financial statements through Sijilat within six months of the financial year end. The statements must be issued by an MOIC-licensed audit firm.
Scaleon prepares and maintains the underlying books and the schedules your auditor will ask for. The audit itself is carried out by an independent licensed auditor that you appoint.
Corporate tax position
- Domestic Minimum Top-up Tax (DMTT): applies from 1 January 2025 to Bahrain entities of multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years, aiming for an effective rate of at least 15% on Bahrain profits
- Oil and gas: Legislative Decree No. 22 of 1979 taxes income from oil exploration, production and refining in Bahrain, and sets a 46% rate for those activities
- Proposed corporate income tax: in December 2025 the NBR announced a draft law for a 10% tax on local companies above set revenue or profit thresholds, targeted for 2027 and subject to legislative approval
- Most other businesses are not currently subject to a general corporate income tax, but the position should be reviewed as the draft law progresses
Ongoing compliance calendar
- Annual CR renewal on Sijilat
- VAT returns and payments for each monthly or quarterly period
- Audited financial statements through Sijilat where required
- DMTT registration and returns for in-scope multinational entities
- Updates to Sijilat records after changes in shareholders, managers or address
Information usually needed
- Commercial registration details and Sijilat records
- Sales and purchase invoices, contracts and bank statements
- Prior financial statements and auditor details, if any
- Existing VAT registration certificate and past returns, if registered
- Group structure chart and consolidated revenue information for DMTT review
- Payroll summaries and fixed asset records
What you receive
- A VAT registration assessment with the applicable threshold analysis
- Coordinated VAT registration with the NBR where required
- VAT return working papers for each period
- Bookkeeping, reconciliations and periodic management accounts
- An auditor-ready year-end pack
- A written tax position summary covering VAT, DMTT scope and the status of the proposed corporate income tax
What affects the fee
- Monthly transaction volume and number of bank accounts
- VAT filing frequency and the mix of standard, zero-rated and exempt supplies
- Condition of existing records and any catch-up work needed
- Group complexity, intercompany transactions and DMTT analysis
- Fees of the licensed local service provider and government charges, passed through at cost
Quotations are itemised, with government fees shown separately from professional fees.
How the process works
- 1
Health check
We review your registrations, records and deadlines to see what is due and what is missing.
- 2
Scope and plan
We agree which VAT, bookkeeping and reporting tasks Scaleon handles and which a local provider handles.
- 3
Set up records
We set up or tidy your chart of accounts, VAT codes and document flow.
- 4
Periodic work
We keep the books and prepare VAT working papers for each period.
- 5
Year end and review
We prepare the auditor pack and update your tax position summary.
Frequently asked questions
When must a Bahrain business register for VAT?
NBR guidance requires registration once taxable supplies exceed BHD 37,500. Businesses above BHD 18,750 can choose to register voluntarily.
How often are Bahrain VAT returns filed?
Businesses with annual taxable supplies above BHD 3 million file monthly; others generally file quarterly. Returns are due by the last day of the month after the period ends.
Does Bahrain have corporate income tax?
There is no general corporate income tax for most businesses at present. Oil and gas income is taxed under its own law, large multinational groups are within the DMTT, and a 10% corporate income tax has been proposed for 2027.
Who is affected by the DMTT?
Bahrain entities of multinational groups with consolidated revenue of at least EUR 750 million in at least two of the four preceding years. Smaller groups and standalone businesses are outside its scope.
Can Scaleon audit my Bahrain accounts?
No. Scaleon prepares books and year-end schedules. The audit must be carried out by an independent MOIC-licensed auditor.