Bahrain

There is no legislation or mechanism for group relief or the taxation of group activities in Bahrain.

DMTT transfer pricing

In computing the CE income or loss, CEs in Bahrain must adjust their income or loss in the books of accounts to align with the arm's-length principle when engaging in transactions with CEs located in a different jurisdiction within the same MNE group. The Executive Regulations provide for five transfer pricing methods (i.e. comparable uncontrolled price method, resale price method, cost plus method, transactional net margin method, and profit split method) for applying the arm’s-length principle, in a manner that is consistent with the OECD Transfer Pricing Guidelines.

Further, in case there exists a bilateral or multilateral Advance Pricing Agreement (APA) with the relevant competent authority, the adjustment to the income or loss of the CE in Bahrain would have to be applied consistently per the arm’s-length price agreed under such APA.

In case of any loss on the sale or transfer of asset between CEs located within the Kingdom, the asset value would be required to be adjusted per the arm’s-length principle whilst determining the income or loss of those CEs.

Additionally, as part of the required compliances, CEs must prepare and maintain both a local file and a master file in a manner prescribed by the National Bureau for Revenue (NBR). The Executive Regulations outline the information required to be included in these files, which align with the OECD Transfer Pricing Guidelines.