In short: The National Bureau for Revenue (NBR) published its DMTT Computation Guide, Version 1.0, dated June 2026 and updated on 23 August 2026. It sets out 12 steps for multinational groups to compute Bahrain’s Domestic Minimum Top-up Tax against the 15% minimum rate. The guide is non-binding; the Decree-Law and Executive Regulations set the rules.
Key facts
| Authority | National Bureau for Revenue (NBR), Kingdom of Bahrain |
|---|---|
| Instrument | DMTT Computation Guide, Version 1.0 (non-binding guidance), applying Decree-Law No. 11 of 2024 and Decision No. 172 of 2024 |
| Issue date | June 2026 (cover date); updated on 23 August 2026 |
| Effective date | The guide sets none. The DMTT Law took effect on 1 January 2025; the Transition Year is the first Fiscal Year beginning on or after that date (Executive Regulations, Article 93) |
| Applies to | Bahrain-located Constituent Entities of Multinational Enterprise Groups that meet the Revenue Test |
| Status | Current published version on the NBR DMTT guides list; non-binding guidance |
| Official source | https://www.nbr.gov.bh/publications/view/dmtt_computation_guide |
| Last verified | 14 October 2026, against the NBR guide page and PDF, the DMTT guides list, the Decree-Law and the Executive Regulations |
What is the guide?
Bahrain issued Decree-Law No. 11 of 2024 on 1 September 2024. It introduced a domestic minimum top-up tax (DMTT) for multinational enterprises. The Executive Regulations followed as Decision No. 172 of 2024, issued on 11 December 2024.
The NBR guide explains how to compute the tax under that framework. Its cover carries the line “Updated on: 23 August 2026”. It gives general information and the NBR’s current views. It does not cover every matter, and it should be read with the Law and the Regulations.
The Law applies the Revenue Test: annual revenue of at least EUR 750 million in the Ultimate Parent Entity’s Consolidated Financial Statements in at least two of the four preceding Fiscal Years.
What are the 12 steps?
The guide gives a recommended sequence for a group that meets the Revenue Test:
- Step 1 Take the financial accounting net income or loss of each Constituent Entity.
- Step 2 Adjust it to Constituent Entity Income or Loss.
- Step 3 Identify Covered Taxes.
- Step 4 Allocate Covered Taxes to other Constituent Entities where needed.
- Step 5 Adjust for temporary differences and losses to reach Adjusted Covered Taxes.
- Step 6 Effective Tax Rate = Adjusted Covered Taxes ÷ Net Constituent Entity Income, computed on an aggregate basis for the Bahrain-located entities.
- Step 7 If that rate is below the Minimum Rate (currently 15%), the Additional Tax Rate is 15% minus the Effective Tax Rate.
- Step 8 Compute the Substance-based Income Exclusion (SBIE).
- Step 9 Taxable Income = Net Constituent Entity Income minus the SBIE.
- Step 10 Add Additional Current Tax.
- Step 11 Add Additional Tax for Permanent Differences.
- Step 12 Tax Due = (Additional Tax Rate × Taxable Income) + Additional Current Tax + Additional Tax for Permanent Differences.
The rate-based part of Step 12 is treated as nil if the Effective Tax Rate is above 15%, there is no Net Constituent Entity Income, the SBIE exceeds that income, or an Exclusion or Safe Harbour applies.
How does it work in numbers?
The SBIE is a percentage of Eligible Payroll Costs plus a percentage of the carrying value of Eligible Tangible Assets. For Fiscal Years beginning in 2026, the guide and the Executive Regulations (Article 46) give 9.4% for payroll and 7.4% for tangible assets.
Illustration, our own arithmetic and not from the guide:
Assume Net Constituent Entity Income of 1,000 and Adjusted Covered Taxes of 80.
| Effective Tax Rate | 80 ÷ 1,000 = 8% |
|---|---|
| Additional Tax Rate | 15% − 8% = 7% |
| Assumed SBIE | 200 |
| Taxable Income | 1,000 − 200 = 800 |
| Rate-based tax | 7% × 800 = 56 |
This is before Steps 10 and 11.
Who is affected?
The guide applies to Constituent Entities located in Bahrain of groups that meet the Revenue Test. One Filing Constituent Entity, appointed by the Bahrain-located entities, carries the main compliance duties. Normally one computation blends all of them. Minority Owned Constituent Entities, Investment Entities and Insurance Investment Entities, and Stateless Constituent Entities are computed separately.
Accounting basis matters. The guide treats IFRS as an Acceptable standard. The Central Bank of Bahrain requires certain entities to use AAOIFI standards. These are Authorised but not Acceptable, so such statements need adjusting for Material Competitive Distortions.
Our note: a Bahrain bank owned by a group above the threshold could fall within scope. Test the group against the NBR Entities in Scope guide.
What should CFOs do next?
The five moves below are practical advice from Neurasix, not requirements of the guide:
- Confirm scope.Test the group against the Revenue Test and check the Exclusions and Safe Harbours the guide lists. The guide says registration and Tax Returns still apply to entities that use them.
- Build the data bridge.Map consolidated accounts to Constituent Entity Income, Covered Taxes, and the payroll and asset data the SBIE needs.
- Decide the elections.An election is Annual or Five-Year. A Five-Year Election must stay in place for at least five consecutive Fiscal Years.
- Appoint the Filing Constituent Entity.Agree the owner, the sign-off and the evidence file.
- Run the test now.Compute the Bahrain Effective Tax Rate for the current year and see whether any top-up arises.
The guide does not cover filing procedures or election mechanics. The NBR publishes those in separate documents, including the DMTT Administrative Guide and the DMTT Return Filing Manual.
Frequently asked questions
What is the Bahrain DMTT minimum rate?
The Minimum Rate is 15%. Where the Bahrain Effective Tax Rate is below it, the Additional Tax Rate is 15% minus the Effective Tax Rate, applied to Taxable Income after the Substance-based Income Exclusion (Decree-Law No. 11 of 2024, Article 9).
How many steps does the NBR guide set out?
Twelve. They run from each Constituent Entity’s financial accounting net income or loss at Step 1 to the computation of Tax Due at Step 12.
Is the NBR DMTT Computation Guide legally binding?
No. The guide says it is not a legally binding document and is not a substitute for professional advice. The rules are in the DMTT Law and the Executive Regulations.
Do entities reporting under AAOIFI need an extra adjustment?
Possibly. The guide says AAOIFI standards are an Authorised but not an Acceptable Financial Accounting Standard, so statements prepared under them need adjusting for Material Competitive Distortions where a material variation from IFRS arises. Where IFRS is used, no such adjustment is needed.
Sources (official, verified 14 October 2026)
- NBR, DMTT Computation Guide, Version 1.0 (guide page) https://www.nbr.gov.bh/publications/view/dmtt_computation_guide
- NBR, DMTT Computation Guide, Version 1.0, updated 23 August 2026 (PDF) https://nbrproduserdata-ir.s3.eu-west-1.amazonaws.com/media/h9LfJsSksP1GFmAQpVsV8cqeo74JGrHL2IqO8Vbb.pdf
- NBR, Guidelines and Publications (DMTT guides list) https://www.nbr.gov.bh/guidelines_and_publications
- NBR, Laws and Executive Regulations: DMTT https://www.nbr.gov.bh/laws_regulations/dmtt
- Decree-Law No. (11) of 2024 Regarding the Implementation of Tax on Multinational Enterprises (PDF; NBR publishes this as an unofficial English translation) https://nbrproduserdata-ir.s3.eu-west-1.amazonaws.com/media/MdG9Rqwlik6J7CejAz3BGo4dZPzZewNQvVnD0CZu.pdf
- Decision No. (172) of 2024, Executive Regulations (PDF; NBR publishes this as an unofficial English translation) https://nbrproduserdata-ir.s3.eu-west-1.amazonaws.com/media/zd3TQ4e8NhKlh4dcNp9vf9oCMLytbcH6BMltNnPQ.pdf
- Bahrain DMTT
- Domestic Minimum Top-up Tax
- Pillar Two
- Global minimum tax
- NBR
- Substance-based Income Exclusion
- Direct taxation
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