How the Bahrain DMTT top-up is worked out
How is the 15% Bahrain top-up tax calculated in simple terms?
The situation
DMTT tops up the Bahrain jurisdictional effective tax rate to 15% using the GloBE rules.
The law
- Decree-Law No. 11 of 2024 on tax on multinational enterprise groups (DMTT Law): 15% domestic minimum top-up tax for MNE groups with consolidated revenue of EUR 750 million or more in two of the four prior years, from fiscal years starting on or after 1 January 2025
What it means for you
Steps: compute GloBE income for Bahrain entities, compute covered taxes, find the effective rate, and apply the top-up percentage to excess profit after the substance based income exclusion. Example: GloBE income BHD 10m, covered taxes BHD 0.3m, ETR 3%, top-up 12%. If the carve out is BHD 1m, top-up = 12% x BHD 9m = BHD 1.08m.
What to do
- Compute GloBE income by entity.
- Compute covered taxes.
- Apply the carve out.
- Compute top-up at 15% less ETR.
We can do this for youDMTT advance payments, top-up tax return and payment: BHD 6,000