Corporate Tax and E-Invoicing: What Bahrain Small Businesses Should Do Before 2027

Two changes are on the horizon for businesses in Bahrain: a proposed corporate income tax, and mandatory e-invoicing. Neither is final yet, and it’s easy to either panic or ignore them. 

There’s a calmer approach. The steps that prepare you for both are the same steps that make your business easier to run today. 

The proposed corporate income tax: what we know 

• Proposed: a 10% tax on company profits, targeted to start in January 2027.

• Threshold: as announced, it would apply to companies with annual revenue above BHD 1 million or net profit above BHD 200,000 — and only to profit above BHD 200,000.

• Status: it is a draft, not law. It was referred to the legislature in December 2025, and in May 2026 a parliamentary committee raised concerns that put it under further review.

For most small businesses, the proposed thresholds mean no tax would be due. But being below a threshold is something you show with accurate accounts. Clean, reconciled books are how you demonstrate where you stand, whatever the final law says. 

E-invoicing: what we know 

The National Bureau for Revenue is preparing a mandatory e-invoicing system. Details and start dates haven’t been published. Regional experience, such as Saudi Arabia’s rollout, suggests a phased start, likely beginning with larger taxpayers. 

What it will almost certainly mean: invoices issued in a structured electronic format from a proper system, not typed up in Word or Excel. Businesses already invoicing from accounting software will have far less to change. 

What to do now 

1. Move to monthly bookkeeping if you’re not there yet. It’s the foundation for tax, VAT and funding.

2. Know your real profit, not just your revenue. Monthly management reports make this routine.

3. Invoice from accounting software. It’s the single biggest step toward e-invoicing readiness.

4. Keep records organised and retrievable, including invoices, contracts and bank statements.

5. Plan your year-end now. Most businesses close on 31 December. Starting in October means December is just another month.

Software is included with our package 

Every Capital Profits monthly package includes the Odoo Accounting module at no extra cost, set up and used by our team to keep your books. If you’d rather use Tally, Sage 50, QuickBooks or Microsoft Dynamics 365 Business Central, we can supply and set up those as a separate purchase. 

That means one affordable monthly fee covers your bookkeeping, VAT and reporting, plus the software to run it — and a CPA-led team watching for what changes in 2027. 

Talk to us about your books. Call +973 17281717 or email info@cpaccounts.com.