Bahrain Tax Update

Analysis

Slim Gargouri provides an update on tax developments in Bahrain, examining the double income taxation and fiscal evasion agreement between the Kingdom and Bermuda, which is effective from 1 January 2013. He then goes onto examine the tax information exchange agreement between the Kingdom and Greenland which is effective for criminal tax matters from 4 October 2011 and for all other matters from 1 January 2013.

Tax Treaty between Bahrain and Bermuda: Effective from 1 January 2013

Bahrain and Bermuda (as authorised by the government of the United Kingdom of Great Britain and Northern Ireland) concluded, at Washington DC on 22 April 2010, an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

Entered into force on 29 January 2012, the tax treaty provisions are effective starting from 1 January 2013. The main provisions of the agreement are as follows:

Permanent establishment

The term "permanent establishment" means a fixed place of business through which the business of an enterprise is wholly or partly carried on.

A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.