Safe Harbour Provisions
🟢 CbCR Safe Harbour
For the first 3 fiscal years (2025-2027): use CbCR data instead of full GloBE calculations. Top-up tax = zero if simplified ETR ≥ 15% (using CbCR revenue and profit). Massive compliance simplification.
🔵 De Minimis Safe Harbour
Revenue < €10 million AND profit < €1 million in a jurisdiction = top-up tax deemed zero. Applies permanently (not just transitional). Critical for small Bahrain entities of large MNEs.
🟡 Initial Phase Relief
First 5 years: no UTPR (Under-Taxed Payments Rule) applies to MNEs with ≤ 12 entities in ≤ 6 jurisdictions. Gives smaller MNEs time to prepare. IIR still applies from year one.
SBIE Calculation
The Substance-Based Income Exclusion carves out income attributable to real economic activity. During the transition period (first 10 years): payroll carve-out starts at 10% and reduces to 5%. Tangible asset carve-out starts at 8% and reduces to 5%. This benefits Bahrain entities with significant employee numbers and physical assets.