BUSINESS leaders in Bahrain must upgrade core systems, clean transaction data and strengthen financial controls to meet upcoming regulatory changes, tax experts have urged.
Talking to the GDN, Grant Thornton Bahrain’s head of tax Shashank Arya and corporate income tax expert Zainab Jasim detailed the combined operational impact of the kingdom’s planned electronic invoicing mandate and proposed Corporate Income Tax (CIT).
The shift follows the Cabinet’s December referral of a draft CIT law to legislative authorities. Under the draft framework, a 10 per cent tax will apply on commercial net profits above BD200,000 or BD1 million annual revenue
Structured to follow international best practices, the regime will be administered by the National Bureau for Revenue (NBR) and is targeted to take effect for fiscal years starting January 1, 2027.
“Tax transformation in the kingdom is moving at an unprecedented pace,” said Mr Arya. “A 10pc CIT alongside the 15pc Domestic Minimum Top-Up Tax (DMTT) for large multinationals means waiting is no longer an option. Organisations must immediately evaluate cross-border payment flows, transfer pricing models, and deferred tax liabilities to protect margins.”
Mr Arya
Standardising billing data will also be critical as e-invoicing rolls out. While official enforcement dates are pending NBR publication, technical standards are expected to align with regional models.
“E-invoicing is an overhaul of financial governance, not a simple software update,” Ms Jasim emphasised.
“Phased rollouts in Saudi Arabia and the UAE showed that poor master data, incompatible ERPs, and weak internal controls create major hurdles. In a real-time clearance system, errors mean immediate regulatory rejection rather than routine quarterly adjustments.”
To help finance leaders prepare, Grant Thornton outlined a four-pillar readiness model focusing on data hygiene, system capability, process controls, and governance.
Organisations must first clean up vendor and customer Tax Identification Numbers (TINs), addresses, product catalogues, and tax codes across legacy systems.
Companies must then reconfigure ERP software to generate structured XML files and connect directly to National Bureau for Revenue (NBR) portals via secure APIs.
Additionally, firms should automate validation checkpoints to eliminate billing errors and process credit or debit notes in compliance with VAT law.
Finally, cross-functional governance requires a joint task force spanning tax, finance, IT, and legal to audit operational workflows and train staff.
Tax experts from the firm will have a briefing session in the coming week for industry experts, finance leaders and stakeholders.
avinash@gdnmedia.bh
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