Bahrain V.A.T. Rate RiseJanuary 2022
Starting January 1, 2022 the V.A.T. rate in Bahrain rose from previous 5% to 10%.
The Bahrain revenue office published transitional provisions effective till December 31, 2022 for 5% charge for standard rated supplies in the transition period, subject to certain terms.
Bahrain V.A.T. RegimeDecember 2018
Starting January 1, 2019 a V.A.T. regime will be implemented in Bahrain.
The 5% rate reporting will be imposed at several steps. Starting January 1, 2019 companies with annual turnover exceeding BD 5 million will have to report from that date. Companies with a turnover of BD 500,000-BD 5 million have to report starting July 1, 2019. All other businesses will report starting January 1, 2020.
Bahrain China Tax TreatyOctober 2013
Bahrain and China signed on September 16, 2013 a new protocol replacing the existing 2002 double tax treaty between the two countries.
According to the tax treaty the tax withholding rate for payments of dividends is 10%. The tax withholding rate for payments of interest and royalties remains as before.
The new tax treaty has yet to be ratified by the parliaments of both countries.
In general double tax treaties between two countries are boosting mutual investments between the countries offering reduced tax withholding rates from payments of dividends, interest and royalties.
The tax treaty often includes an exchange of tax information clause and definition of a permanent establishment for activities carried in the other country.
It also clarifies certain cross border tax issues.
E.g the treaty would define in what country tax is to be paid when a service supplier/consultant from country A provides services in country B.
In some treaties there is a tax credit under certain terms. E.g. an exemption to a consultant from country A of X dollars per each day of staying in country B in order to supply the taxable services.
Bahrain Credit Rating DowngradedAugust 2010
Moody's credit rating agency downgraded on August 23, 2010 Bahrain's credit rating from A2 to A3.
The rating which is the lowest among the six states of the Arab gulf follows worries about Bahrain's inability to meet contingent liabilities in future backed on insufficient tax revenues if oil receipts decrease.
Bahrain Malta Double Tax TreatyApril 2010
The finance ministers of Bahrain and Malta signed on April 12,2010 a new double taxation agreement, DTA, between the two countries.
The agreement deals with avoidance of double taxes from all kinds of income taxes, including capital gains and and also deals with exchange of tax informaion, in line with the OECD model confirmed in the G20 summit in London.
Bahrain has now 29 DTAs, 20 are already in effect. 18 of Bahrain's DTAs are in line with the OECD model for exchange of tax information.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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