Bahrain's 15% DMTT: who actually pays it
Bahrain introduced its first corporate tax in 2025, a 15% top-up. But it reaches only the world's largest groups, and for everyone else the rate is still 0%. Here is exactly where the line falls.
Bahrain's first corporate tax, aimed high
For decades Bahrain levied no corporate income tax at all. That changed, narrowly, with the Domestic Minimum Top-up Tax (DMTT), introduced by Decree-Law No. (11) of 2024, published on 1 September 2024 and effective for fiscal years starting on or after 1 January 2025. It imposes a 15% effective tax on in-scope groups' Bahraini profits, and it is administered by the National Bureau for Revenue (NBR).
The crucial point is who it reaches. The DMTT is Bahrain's implementation of the OECD's Pillar Two global minimum tax, and it applies only to large multinational enterprise (MNE) groups with consolidated global revenue of EUR 750 million or more in at least two of the four preceding fiscal years. For everyone below that line, which is the overwhelming majority of Bahrain's businesses, nothing has changed: the rate remains 0%.
Keep the tax at home
The logic of Pillar Two is that very large multinationals should pay an effective 15% wherever they operate. If Bahrain had kept its 0% rate for these groups, the shortfall to 15% would simply have been collected by another country, where the parent sits, under the OECD's top-up mechanism. By introducing its own 15% domestic top-up, Bahrain keeps that revenue in the Kingdom rather than ceding it abroad, while leaving its 0% regime intact for everyone the global rules do not touch. It is a defensive, revenue-protecting move, not a shift away from Bahrain's low-tax model.
The DMTT does not make Bahrain a 15% jurisdiction. It is a targeted top-up on groups already caught by Pillar Two worldwide. A separate, broader corporate income tax is now in the legislative pipeline: a draft law referred in December 2025 proposes 10% for companies with revenue above BHD 1 million or net profit above BHD 200,000, expected from January 2027 if enacted. Until it is passed and published it is not law, but it should be modelled.
The line is the EUR 750m group
Large MNE groups
- Part of a multinational group with EUR 750m+ consolidated global revenue
- In two of the four preceding fiscal years
- On the group's Bahraini profits
- Must register and file with the NBR
Everyone else
- Standalone companies and SMEs
- Foreign-owned WLLs below the group threshold
- Domestic Bahraini businesses
- No corporate-tax filing on this basis
If you are a single foreign investor setting up a WLL, or an SME, you are almost certainly out of scope and continue at 0%. The DMTT is a concern for the Bahraini entities of the world's largest groups, and for them it is a compliance exercise, registration, GloBE calculations and filing with the NBR, rather than a surprise.
What it actually involves
For a group that is caught, the DMTT is an administrative obligation layered onto existing global Pillar Two work rather than a standalone shock. The Bahraini entity must register with the NBR, compute its top-up under the GloBE rules, reconcile the Bahraini effective rate to 15%, and file within the deadlines the NBR sets. Because the figures flow from the group's consolidated accounts and global Pillar Two position, the Bahrain filing is best handled as part of the group's wider minimum-tax compliance, not in isolation. The practical risk is not the rate, which the group was going to pay somewhere, but missing the Bahraini registration and filing that keep the liability payable in Bahrain rather than topped up elsewhere.
Guides, filing and penalties
The DMTT is no longer only a statute; the National Bureau for Revenue has built out the administration around it. In June 2026 the NBR released guidance including a DMTT computation guide and a transfer pricing guide, and in August 2026 it published a DMTT return filing manual. Bahrain's DMTT is recorded with transitional qualified status for global minimum tax purposes as a qualified domestic minimum top-up tax meeting the safe-harbour standards from 1 January 2025, which matters to in-scope groups because it means the top-up is collected in Bahrain rather than abroad.
Registration and filing
In-scope constituent entities register with the NBR and file DMTT returns in line with the filing manual, using figures from the group's consolidated accounts and GloBE computations.
Transfer pricing in scope
The NBR's DMTT transfer pricing guide makes clear that related-party pricing affects the Bahraini effective tax rate and therefore the top-up. Groups should align their Bahrain TP position with their global Pillar Two work.
Late filing and payment
Bahrain's tax laws apply penalties for returns or payments that are outstanding, commonly calculated as a percentage of the liability for each 30-day period of delay, so missing a DMTT deadline is costly.
Disputes
A DMTT assessment is reviewed first by the NBR on a timely request for review, then on appeal and before the courts. The group's GloBE workpapers are the evidence.
What the draft law would mean
For most businesses reading this, the DMTT is not the issue; the draft corporate income tax is. In December 2025 the Cabinet referred a draft law to the legislature that would introduce a 10% corporate income tax on companies with annual revenue above BHD 1 million or net annual profit above BHD 200,000, expected to take effect from January 2027 if enacted. The Bahrain Chamber of Commerce and Industry briefed the business community on it in February 2026. According to reporting on the draft, it is expected to be broad-based, without the exemption for profits attributable to GCC nationals that Kuwait, Qatar and Saudi Arabia provide.
Until it is passed and published, it is not law, and its final shape may change. But a business above the thresholds should already be modelling it: the effect on pricing, on the attractiveness of Bahrain as a holding location, and on how Bahrain's tax treaties will relieve double taxation once a Bahraini tax exists. Smaller companies below the thresholds would remain outside it as drafted. We track the bill and will update this guide when the text is final.
A 10% rate with thresholds would still leave Bahrain among the lowest-tax places in the region for operating businesses, and SMEs below the thresholds would be unaffected as drafted. The point is to stop describing Bahrain as permanently tax-free in investment papers and board decks.
Questions we get asked first
What is the Bahrain DMTT?
A 15% Domestic Minimum Top-up Tax introduced by Decree-Law No. (11) of 2024, effective for fiscal years from 1 January 2025. It implements the OECD's Pillar Two global minimum tax on large multinational groups' Bahraini profits, administered by the National Bureau for Revenue.
Who has to pay it?
Only multinational enterprise groups with consolidated global revenue of EUR 750 million or more in at least two of the four preceding fiscal years. Standalone companies, SMEs and ordinary foreign-owned WLLs below that threshold are out of scope and remain at 0%.
Does the DMTT affect my small Bahrain company?
No. If your business is below the EUR 750 million group threshold, nothing changes under the DMTT: you stay outside it. A draft law before the legislature would add a 10% corporate income tax from January 2027 for companies with revenue above BHD 1 million or profit above BHD 200,000, if enacted.
Is Bahrain now a 15% tax country?
No. The DMTT is a targeted top-up on groups already caught by Pillar Two worldwide, not a general corporate tax. Bahrain keeps 0% for everyone outside the global rules.
Is a broader corporate tax coming?
A draft law referred to the legislature in December 2025 proposes a 10% corporate income tax for companies with annual revenue above BHD 1 million or net profit above BHD 200,000, expected from January 2027 if enacted. It is not yet law, but businesses above those thresholds should model it.
What do in-scope groups have to do?
Register with the NBR, compute the top-up under the GloBE rules, reconcile to a 15% effective rate on Bahraini profit, and file on time, best handled as part of the group's wider Pillar Two compliance.
A giants' tax, not yours
The DMTT changed one thing: the world's largest groups now pay 15% on their Bahraini profit instead of 0%, so that Bahrain keeps the revenue rather than ceding it abroad. For the ordinary foreign investor and the SME, Bahrain is still a 0% corporate-tax jurisdiction today, although a draft 10% tax for companies above BHD 1 million revenue or BHD 200,000 profit is before the legislature. If your group is in scope, the task is registration and filing with the NBR as part of your global Pillar Two work; if it is not, carry on.
Unsure whether the DMTT reaches you?
We confirm your scope against the EUR 750 million group test and, where you are caught, handle the NBR registration and filing.
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This article is general information, current as of 2026, and is not advice for any specific situation. Confirm current rules with the MOIC, the NBR or the relevant authority before acting.