Actual activity versus CR activity code

The situation

KPMG notes that the assessment should consider actual activities undertaken, regardless of the CR codes.

The law

• Economic substance rules: Ministerial Order No. 106 of 2018 and CBB Directive OG/499/2018: Entities carrying on relevant activities must show core income generating activity and management in Bahrain and lodge an ES return

What it means for you

If you truly carry on no relevant activity, record that conclusion. But MOIC systems may flag the CR code, so consider amending the CR to match reality. This avoids recurring questions.

What to do

1. Document actual activities.
2. Conclude on relevance.
3. Amend CR codes if they mislead.
4. Keep the memo.

Related

• Official guidance on Bahrain ES
• Do Bahrain economic substance rules still apply
• Missed ES return blocks CR renewal
• Which activities trigger Bahrain ES
• Bahrain ES return deadline
• CBB licensees and economic substance