NBR Income Tax Brackets in Bahrain for 2024

The gateway to the Gulf Cooperation Council’s (GCC) $2.1 trillion trade market, the Kingdom of Bahrain (hereafter referred to as Bahrain) is the optimal hub for operating in the GCC. Business activities here are liberalized with 100% foreign ownership for most activities permitted. As a free market economy, there are no restrictions on capital flows, foreign exchange, foreign trade or foreign investment. The taxation system in Bahrain is administered by the official tax body, the National Bureau for Revenue (NBR).

The Income Tax Decree No. 22 of 1979 provides support and guidance in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding tax brackets and tax rates, for effective tax planning and to remain compliant with tax laws in Bahrain.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• social insurance organization contributions for employed individuals
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax (WHT) rates
• value-added tax (VAT) rates

Headline Tax Rates in Bahrain

Personal Income Tax (PIT) Rates in Bahrain for 2024

There is no personal income tax (PIT) regime in Bahrain.

Social Insurance Organisation Contributions (SIO) for Employed Individuals

However, individuals employed by a natural person, legal entity or an enterprise in Bahrain are subject to monthly contributions to the Social Insurance Organisation (SIO) as tabulated below: 

Corporate Income Tax (CIT) Rates in Bahrain for 2024

Bahrain does not impose corporate tax on income, sales, capital gains or estates on general businesses. 

However, local and foreign businesses that operate in the oil and gas sector, or derive profits from the extraction or refinement of fossil fuels (defined as hydrocarbons) in Bahrain are subject to a CIT rate of 46% on net profits for each tax accounting period, regardless of the taxpayers residence.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Bahrain

There is no capital gains tax (CGT) regime in Bahrain.

Withholding Tax Rates in Bahrain

Bahrain does not impose any withholding taxes (WHT) on the payment of dividends, interest, or royalties. However, Bahrain does have Double Tax Treaties (DTT) with various countries.

Value-Added Tax Rate in Bahrain

Implemented from January 2019, the standard value-added tax (VAT) used to be 5% but was increased to 10% in January 2022. The standard rate applies to most goods and services. However, in certain exceptional situations, certain goods or services may be subject to a 0% rate or be exempt from VAT.