A first-time comprehensive Double Taxation Agreement between the United Kingdom and the Kingdom of Bahrain was signed in Manama on 10th March 2010 by Jamie Bowden, the British Ambassador to the Kingdom of Bahrain, and H.E. Shaikh Ahmed bin Mohammed Al Khalifa, Bahrain's Minister of Finance.

The treaty generally follows the OECD Model Double Taxation Convention. Important features include:

• the latest OECD provision on exchange of information
• zero rate of withholding tax on dividends (except for REITs) and on royalties
• 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 text of the new Agreement is available on HM Revenue & Customs' website, at 'Tax Treaties - Signed/not in force' and will be published by the Stationery Office as soon as it is presented to Parliament for approval.

The Agreement enters into force once both countries have completed their legislative procedures. The provisions of the Agreement will then take effect from the next calendar year.


For more information:

• HM Revenue & Customs
• UK/Bahrain Tax Treaty

Source: HM Revenue & Customs