The Legislative and Legal Opinion Commission has confirmed the issuance of Law Decree No. 11 of 2024 in Bahrain, which aims to regulate taxation for multinational enterprises. The law is part of urgent measures to enhance the Kingdom’s public revenue system and explore new sources of financial funding. The goal of the law is to address the rising public expenditure driven by the expansion of public projects and mitigate the budget deficit.
The proposed law consists of 44 articles divided into seven chapters. The first chapter outlines the preliminary provisions and objectives of the law, while the second chapter addresses the scope of the tax and its imposition. The third chapter details the calculation and payment methods, the fourth chapter covers tax procedures and obligations, and the fifth chapter deals with administrative accountability and dispute resolution. The sixth chapter addresses criminal liability, and the final chapter provides concluding provisions.
The Commission believes that this law will contribute to the financial and economic stability of Bahrain, which is crucial for the nation’s resilience. It aims to build upon previous financial, economic, and structural reforms to achieve fiscal stability and balance. The framework is expected to bolster confidence in the Bahraini economy, stimulate economic activity, and support the government’s goal of achieving high and sustainable economic growth. Additionally, it seeks to ensure equitable distribution of the benefits of growth, address social and tax justice requirements, and provide financial space for developmental projects and social programs.
The law also aligns with international standards requiring all economic activities to be subject to taxation. It emphasizes the necessity of implementing a minimum global tax and local taxes on multinational enterprises operating in Bahrain. These measures will be applied in accordance with OECD guidelines, particularly regarding the Base Erosion and Profit Shifting (BEPS) framework. Without imposing and collecting taxes in Bahrain, multinational enterprises would continue to fulfill their tax obligations in other countries for activities conducted in the Kingdom.
In conclusion, Law Decree No. 11 of 2024 in Bahrain aims to regulate taxation for multinational enterprises as part of urgent measures to enhance the Kingdom’s public revenue system. The law consists of 44 articles divided into seven chapters, with provisions outlining the scope, calculation, payment methods, and administrative accountability. The Commission believes that this law will contribute to the financial and economic stability of Bahrain, stimulate economic activity, and support the government’s goal of achieving high and sustainable economic growth. Additionally, the law aligns with international standards and OECD guidelines for taxation of multinational enterprises operating in Bahrain.
