Signed on 16 September 2013, the protocol amending the tax treaty between Bahrain and China entered into force on 1 April 2016. The new amendments came into effect on 1 January 2017.

Under the new provisions, the tax chargeable on dividends by the contracting state of which the company paying the dividends is a resident will not exceed 10% of the gross amount of the dividends. Under the previous rules, the cap was 5% of the gross amount of the dividends.

The new measures also clearly specify that the provisions of the agreement will in no case prevent a contracting state from the application of the provisions of its domestic laws aiming at the prevention of fiscal evasion and avoidance, provided that the taxation in that state on the income concerned is not contrary to the Agreement.