Thursday, March 11, 2010
The Kingdom of Bahrainís Minister of Finance, Shaikh Ahmed bin Mohammed Al Khalifa, and UK ambassador, Jamie Bowden, signed a comprehensive double taxation agreement (DTA) between the two countries in Manama on March 10.
The new DTA generally follows the Organisation for Economic Co-operation and Development (OECD) model double taxation convention, including the internationally-agreed OECD standard for the provision on exchange of information.
There will also be zero rates of withholding tax on dividends (except for real estate investment trusts) and on royalties; and a zero rate of withholding tax on interest but with a provision to ensure the benefits of the interest article can only flow to residents of the other state.
The DTA is a new addition to the 27 similar agreements already signed by the Kingdom of Bahrain. It will enter into force once both countries have completed their legislative procedures, and its provisions will then take effect from the next calendar year.