1. Comprehensive reporting to the National Bureau for Revenue.
2. Ensuring MNEs pay a minimum tax rate on income earned in Bahrain.
3. Establishing a safe harbor for domestic top-up taxes.
4. Aligning Bahrain's tax framework with international OECD guidelines, particularly the Model Rules for preventing BEPS.
The law introduces tax calculations based on financial accounting net income and creates safe harbor rules for compliance. Excluded entities includes
1. Government bodies.
2. International organizations.
3. Pension funds.
4. Non-profit organizations.particularly the Model Rules for preventing BEPS.
5. A real estate investment vehicle that is an Ultimate Parent Entity.
6. Entities with special caveats.
The tax is calculated based on a multinational group’s financial statements and adjusted for various exclusions, such as payroll and tangible assets, to compute the effective tax rate. MNEs operating in multiple jurisdictions must calculate their taxable income based on the new requirements, and penalties are imposed for non-compliance. Additionally, the law outlines procedures for registration, tax filing, penalties for evasion, and audit processes.
1. Automated Financial Reporting: ERPNext generates detailed financial statements in accordance with International Financial Reporting Standards (IFRS). This feature ensures that businesses meet the requirements for filing financial reports and tax returns as outlined in the law.
2. Accurate Tax Calculations: With built-in tax computation modules, ERPNext helps corporations accurately calculate taxable income, adjusted covered taxes, and effective tax rates. This ensures compliance with the 15% minimum tax rate and any additional taxes as specified by the law.
3. Multi-Jurisdictional Support: The platform supports operations across different jurisdictions, which is essential for multinational enterprises managing entities in different countries. ERPNext helps consolidate financial data for ultimate parent entities and their subsidiaries, ensuring seamless compliance with cross-border tax regulations.
4. Data Management and Record-Keeping: ERPNext offers robust document and record-keeping features, ensuring that businesses can store and access records, accounting books, and supporting documents as required by the National Bureau for Revenue. This is crucial for audit purposes and compliance with Article 25 of the law.
