Oil and gas companies under the Bahrain draft

The situation

A separate 46% income tax continues for hydrocarbon exploration, production and refining entities, per the KPMG summary of the draft.

The law

• Draft Corporate Income Tax Law (not yet enacted): Proposed 10% tax on taxable income above BHD 200,000 for residents with revenue over BHD 1 million or taxable income over BHD 200,000, expected from 1 January 2027

What it means for you

Oil and gas entities stay under their own regime. The draft lists tax under that regime as a possible deduction from CIT liability. Most SMEs are unaffected.

What to do

1. Check if your activity is hydrocarbon related.
2. If yes, stay under the existing regime.
3. If no, use the draft CIT model.
4. Watch final text.

Related

• Late filing penalty proposed in Bahrain CIT
• Preparing systems for Bahrain CIT
• Draft CIT and DMTT together
• Is Bahrain corporate income tax in force
• Small business and nil CIT returns
• Who would pay the proposed Bahrain CIT