Common Transaction Types
💰 Management Fees
Head office charges for shared services. Must demonstrate actual benefit received. Benchmarking required — typically 3-7% of revenue or cost-plus markup.
📜 Royalties & IP Licensing
Brand licensing, trademark fees, and technology royalties. Rate depends on DEMPE analysis — development, enhancement, maintenance, protection, exploitation of IP.
🏦 Intercompany Loans
Interest rate must reflect credit rating and terms. Cash pooling arrangements require separate analysis. Guarantees may trigger guarantee fee pricing obligation.
📦 Goods Transfers
Buy-sell arrangements, consignment stock, and contract manufacturing. Customs value must align with transfer price. VAT on intercompany sales at market value.
👨💼 Secondment Costs
Cross-charging expatriate employee costs. Cost-plus markup may be required. GOSI and LMRA obligations remain with the Bahrain entity.
⚠️ VAT Alert: Intercompany supplies between VAT-registered Bahrain entities are subject to standard VAT. Under-pricing related-party supplies may trigger NBR adjustment powers to assess VAT on market value.