MANAMA: Businesses in Bahrain have until end February 2022 to report their Country-by-Country (CbC) information, with the fresh alert coming after the deadline extension.
Experts from Bahrain-based audit and advisory firm Grant Thornton Abdulaal told GDN that while Bahrain had ratified the agreement on the automatic exchange of CbC reports, the time has now come to understand, assimilate and submit.
This follows from the kingdom becoming a member of the Organisation for Economic Co-operation and Development (OECD) – Base Erosion and Profit Shifting – BEPS Inclusive Framework (IF) and committing to align itself with the international tax framework by implementing the BEPS minimum standards for tax.
The OECD requires multinational enterprise (MNE) groups to file Country-by-Country (CbC) reports – setting out the financial information for each tax jurisdiction where the group has a presence.
The CbC reporting provides the necessary information to tax authorities around the world to assess the business reasons, which may construe as ‘profit shifting’, between different constituents of MNE groups and the related transfer-pricing implications.
Taking this into effect, the CbC requirement applies to all businesses that have a legal entity or branch in Bahrain and are members of an MNE group with annual turnover of BD342 million.
As per the earlier ministerial order, the information required to be submitted is for fiscal year end 2021, though it seems that the alert mentions fiscal year 2020. A clarification to this effect may help businesses to submit the right information.
“The extension of deadline from December 2021 to February 2022 is a good move, however initial teething issues may occur that may want businesses to have adequate time to prepare,” says Suresh Nandlal Rohira, the tax leader at Grant Thornton Abdulaal.
“He further added that, it is imperative for organisations to understand, prepare and submit the right information for these compliances in the days to come as “a stich in time would save nine.”
Concurring with Mr Suresh, the firm’s senior partner Jatin Karia says, “In light of the planned investments in the country close to $30 billion by the government, it is imperative that Bahrain prepares to align with global best practices and standards.”
The government has notified that failure to comply with CbCR rules may result in penalties and/or suspension of commercial registration for a specified period.
© Copyright 2020 www.gdnonline.com
Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).