Bahrain is another country that has implemented Country-by-Country (CbC) reporting requirements to increase tax transparency and combat tax avoidance by multinational corporations (MNCs). The CbC reporting rules in Bahrain were introduced in 2018 as part of the country’s commitment to implementing international tax standards.

Under the Bahrain CbC reporting rules, MNCs with consolidated group revenue of more than BHD 50 million (approximately USD 132 million) are required to submit a CbC report to the Bahraini tax authorities. The report must be filed within 12 months from the end of the fiscal year to which the report relates.

The CbC report must include information on the global allocation of income, taxes paid, and certain indicators of economic activity in each jurisdiction where the MNC operates. The report must also include information on the constituent entities of the MNC, their jurisdiction of tax residence, and their business activities.

MNCs are also required to file a notification with the Bahraini tax authorities if they are the ultimate parent entity of a multinational group or if they are designated to file the CbC report on behalf of the group. The notification must be filed within 30 days from the end of the fiscal year to which the report relates.

MNCs must ensure that their CbC reports are in compliance with the Organization for Economic Cooperation and Development (OECD) guidelines on CbC reporting. The OECD guidelines provide a standardized approach to CbC reporting and aim to ensure consistency and comparability of information across different jurisdictions.

Failure to comply with the CbC reporting requirements in Bahrain may result in penalties, including fines and restrictions on the ability to do business in Bahrain. It is therefore important for MNCs operating in Bahrain to ensure that they are fully compliant with the reporting requirements.

MNCs may face some challenges in complying with the CbC reporting requirements in Bahrain. For example, MNCs with complex organizational structures and business operations may find it difficult to provide the required information in a timely and accurate manner. In addition, MNCs may need to develop new systems and processes to collect and analyze the required data.

Overall, the introduction of CbC reporting requirements in Bahrain is a positive step towards increasing tax transparency and combatting tax avoidance by MNCs. The requirements provide the tax authorities with valuable information on the global operations of MNCs and help to ensure that these corporations pay their fair share of taxes in the countries where they operate. MNCs operating in Bahrain should ensure they comply with the CbC reporting requirements to avoid penalties and maintain their ability to do business in the country.