Decree-Law No. (11) of 2024 Regarding the Implementation of Tax on Multinational Enterprises (DMTT Law), issued 1 September 2024, effective 1 January 2025
Decision No. (172) of 2024 — Executive Regulations for Decree-Law No. (11) of 2024, issued 11 December 2024
National Bureau for Revenue (NBR), DMTT Transfer Pricing Guide (Version 1.0), June 2026
Summary of local requirements
Strict Format: not specified
Language: English
To download the legislation in the original language, go to:
A local file should include information in the following key categories:
1.
Information about the Constituent Entity, Joint Venture and Joint Venture Subsidiary located in Bahrain
Description of the business activities and business strategy of each Constituent Entity, Joint Venture and Joint Venture Subsidiary located in Bahrain.
Description of past restructuring, including indication of whether the Constituent Entity, Joint Venture and Joint Venture Subsidiary located in Bahrain has been involved in or affected by a business restructuring or intangible asset transfer in the Fiscal Year or immediately preceding Fiscal Year together with an explanation of those aspects of such transaction affecting the Constituent Entity, Joint Venture and Joint Venture Subsidiary.
Description of the management structure of the Constituent Entity, Joint Venture and Joint Venture Subsidiary located in Bahrain, local organisation chart and a description of the natural persons to whom local management reports.
2.
Information about controlled transactions
Identification of the relevant transactions or arrangements of Constituent Entity, Joint Venture and Joint Venture Subsidiary located in Bahrain with other Constituent Entity, Joint Venture and Joint Venture Subsidiary of the same Multinational Enterprise Group (including those located in Bahrain when relevant).
Description of all identified transactions or arrangements including the context in which such transaction or arrangement took place.
Identification of other Constituent Entities, Joint Ventures and Joint Venture Subsidiaries of the same Multinational Enterprise Group involved in each of the identified transactions or arrangements and the relations among them.
Detailed comparability and functional analysis of the Constituent Entities, Joint Ventures and Joint Venture Subsidiaries located in Bahrain and relevant other Constituent Entities, Joint Ventures and Joint Venture Subsidiaries with respect to each identified transaction or arrangement.
Information on significant changes in intra-group transactions compared to prior Fiscal Years.
List and description of selected internal or external comparable uncontrolled transactions or arrangements.
Description of the transfer pricing policy in place.
Indication of the most appropriate transfer pricing method with regard to the identified transaction or arrangement together with a descriptive explanation of the reasons for selecting the method and, if applicable, an explanation of the tested party.
Copies of existing unilateral, bilateral or multilateral Advance Pricing Agreements (APAs) and other tax rulings which are related to identified transactions or arrangements.
Copies of all material intercompany agreements concluded by the Constituent Entities, Joint Ventures and Joint Venture Subsidiaries located in Bahrain.
3.
Financial information
Information on relevant financial indicators for independent enterprises which has been relied on for the purposes of the transfer pricing analyses, including a description of the comparable search strategy and all the steps taken and the source of such information.
Description of any comparability adjustments performed, and an indication of whether any adjustments have been made to the results of the tested party, the comparable uncontrolled transactions or arrangements, or both.
Financial information of the Constituent Entities, Joint Ventures and Joint Venture Subsidiaries located in Bahrain including the annual financial accounts for the Fiscal Year.
Information and allocation schedule showing how the financial data used in applying the transfer pricing method may be tied to the annual financial statements
Recommendations for Local File:
Regarding content requirements:
Management Structure and Reporting Lines:
Bahrain requires a description of the management structure, the local organisation chart, and identification by name of the natural persons to whom local management reports. This goes beyond the standard OECD Local File requirement, which does not explicitly require identification of specific natural persons at the top of the local reporting line.
We recommend including this information in the Management Structure subsection of the Entity Description section in TPDoc, explicitly naming the natural persons at the top of the local reporting line.
Business Restructurings and Intangible Asset Transfers:
Bahrain requires an explicit indication of whether the entity has been involved in or affected by a business restructuring or intangible asset transfer in the current or immediately preceding Fiscal Year, with an explanation of those aspects — covering two fiscal years rather than the current year only.
We recommend documenting this in the Business Restructurings section in TPDoc for both the current and preceding year. Where no restructuring or transfer occurred in either year, an explicit statement to that effect should be included.
Significant Changes in Intragroup Transactions Compared to Prior Years:
Bahrain explicitly requires documentation of significant changes in intragroup transactions compared to prior Fiscal Years as a separate, standalone requirement within the Local File — this is more explicit than the OECD standard, which treats prior-year changes as part of the general functional analysis.
We recommend including a dedicated year-on-year changes section in the Functional Analysis of the relevant Reporting Level in TPDoc, explicitly describing any material changes to transaction terms, volumes, counterparties, or pricing methodology compared to the prior Fiscal Year, and confirming where no material changes have occurred.
Copies of Material Intercompany Agreements and Foreign APAs/Rulings:
Bahrain requires copies of all material intercompany agreements and copies of all existing APAs and other tax rulings (including those to which Bahrain is not a party) to be included within the Local File itself — not merely referenced.
We recommend uploading all material intercompany agreements in the Legal Agreements section of TPDoc and any relevant foreign APAs or rulings in the Rulings section, and attaching them directly to the Local File.
Regarding format/structural requirements:
Bahrain does not prescribe a strict standardised format or template for the Local File. The Local File must be prepared in English and maintained for five years, to be made available to the NBR upon request.
We recommend preparing the Local File using TPDoc's standard Local File functionality, ensuring all required elements under Decision No. (172) of 2024 are addressed and that the documentation is finalised contemporaneously.
Master File
A master file should include information in the following key categories:
1.
The organisational structure of the Multinational Enterprise Group
An organisational structure illustrating the Multinational Enterprise Group's ownership structure and geographical location of operating entities.
2.
A general description of the Multinational Enterprise Group's business(es), which includes all of the following:
Important drivers of business profit.
A description of the supply chain for the Multinational Enterprise Group's five largest products or service offerings based on turnover and any other products or service offerings which account for at least 5% of the Multinational Enterprise Group's turnover.
A list and description of important service arrangements between members of the Multinational Enterprise Group, except for research and development services.
A description of the main geographic markets for the Multinational Enterprise Group's products and services.
A functional analysis describing the principal contributions to value creation by individual Constituent Entities, Joint Ventures and Joint Venture Subsidiaries within the Multinational Enterprise Group.
A description of important business restructuring transactions, acquisitions and disposals which occurred during the Fiscal Year.
3.
Description of the Multinational Enterprise Group's intangibles
A description of the Multinational Enterprise Group's overall strategy for the development, ownership and exploitation of intangibles, including the location of principal research and development facilities and location of research and development management.
A list of intangibles or groups of intangibles owned by the Multinational Enterprise Group that are important for transfer pricing purposes and information on which Constituent Entity, Joint Venture and Joint Venture Subsidiary legally owns them.
A description of the Multinational Enterprise Group's transfer pricing policies related to research and development and intangibles.
A description of any significant transfers of interest in intangible assets among Constituent Entities, Joint Ventures and Joint Venture Subsidiaries which are members of the same Multinational Enterprise Group during the Fiscal Year including the Constituent Entities and compensation involved.
4.
The Multinational Enterprise Group's financial activities
A description of how the Multinational Enterprise Group is financed, including significant financing arrangements with unrelated lenders.
The identification of members of the Multinational Enterprise Group that provide a central financing function for the Group, including the country under whose laws the entity is organised and its place of effective management.
A description of the Multinational Enterprise Group's transfer pricing policies related to financing arrangements between Constituent Entities, Joint Ventures and Joint Venture Subsidiaries.
5.
The Multinational Enterprise Group's financial and tax positions
The Multinational Enterprise Group's annual Consolidated Financial Statement for the Fiscal Year concerned, if prepared, for financial reporting, regulatory, internal management, tax or other purposes.
A list and brief description of the Multinational Enterprise Group's existing unilateral APAs and other tax rulings relating to the allocation of income among countries.
Recommendations for Master File:
Regarding content requirements:
Functional Analysis of Value Creation at Entity Level:
Bahrain requires a functional analysis describing the principal contributions to value creation by individual Constituent Entities, Joint Ventures, and Joint Venture Subsidiaries within the MNE Group. The standard OECD BEPS Action 13 Master File requires only a general description of the group's business and does not mandate a formal entity-level functional analysis at the Master File level — this is a Bahrain-specific addition.
We recommend preparing this value creation functional analysis in the Group Overview for Master File section of TPDoc, explicitly linking each key Constituent Entity's functions, assets, and risks to its contribution to the Group's overall value creation and profit allocation.
Regarding format/structural requirements:
Bahrain does not prescribe a strict standardised format or template for the Master File. The Master File must be prepared in English, maintained for five years, and made available to the NBR upon request.
We recommend preparing the Master File using TPDoc's standard Master File functionality, ensuring all required elements under Decision No. (172) of 2024 are covered.