Three Safe Harbour Tests
A jurisdiction qualifies for elective safe harbour if it meets any one of these three tests (using CbCR data):
Test 1: De Minimis
Revenue < €10 million AND profit < €1 million in the jurisdiction. If met, top-up tax=zero. Most Bahrain subsidiaries with limited operations will qualify.
Test 2: Simplified ETR
Simplified ETR ≥ transitional rate (15% from 2024, 16% from 2025, 17% from 2026). Uses CbCR income tax expense / CbCR profit before tax. If Bahrain CEs pay enough DMTT, this test passes.
Test 3: Routine Profits
Profit ≤ SBIE (substance-based income exclusion). If the jurisdiction's profit is less than the payroll and tangible asset carve-outs, top-up tax = zero. Bahrain entities with large workforces and assets may qualify.