Corporate tax in Bahrain

Summary  
Corporate Income Tax Rate (%) 0*
Capital Gains Tax Rate (%) 0
Branch Tax Rate (%) 0
Withholding Tax (%) 0

* Oil and gas companies are subject to a special income tax (see Section B).

Taxes on corporate income and gains

Except for the income tax levied on oil and gas companies, no taxes are levied on corporate income or gains. Oil and gas compa­nies are subject to tax on income derived from the sale of finished or semifinished products manufactured from natural hydrocarbons in Bahrain and from the sale of such raw materials if produced from the ground in Bahrain. The rate of tax is 46%.

Other significant taxes

The following table summarizes other significant taxes.

 

Nature of tax Rate
Customs duties; effective from 1 January 2003,
the customs duties of the Gulf Cooperation
Council (GCC) countries (Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia and the United
Arab Emirates) are unified; the guidelines
for implementation of the unified tariff are
being developed; Bahrain applies the unified
tariff in accordance with the Harmonized
System codes, issued by the World Customs Organization (WCO); under the unified customs tariff, for all products, except for
tobacco and tobacco-related products,
customs duties are calculated by applying
percentage rates; for tobacco and tobacco‑
related products, the customs duty equals
the higher of an amount calculated by
applying a rate of at least 100% to the
value of the product or an amount based
on the quantity or weight; in general,
products are divided into four groups
Rates for the four groups Free duty/5%/100%/125%
Social insurance contributions; payable
On compensation of up to BHD4,000
per month for each employee
Pension fund contributions; applicable to base salaries of Bahraini nationals
Employer 9.00%
Employee 6.00%
Insurance against employment injuries;
payable by employers; applicable to base
Salaries of Bahraini nationals and expatriates
3.00%
Unemployment insurance; payable by
employees; applicable to Bahraini
nationals and expatriates
1.00%
Training levy; payable by employers; applicable
To base salaries of expatriate employees
3.00%
Municipal tax; payable by companies and
individuals renting property in Bahrain;
the tax rate varies according to the nature
of the property and the payer of the utilities (that is, landlord or tenant)
7% to 10%
Foreign workers levy; payable monthly
By all private and public companies
with respect to each employed expatriate
BHD5 for the first five
expatriate employees and
BHD10 for each additional
Expatriate employee

Foreign-exchange controls

Bahrain does not impose foreign-exchange controls.

Tax treaties

Bahrain has entered into tax treaties with Algeria, Austria, Barba­dos, Belarus, Belgium, Bermuda, Brunei Darussalam, Bulgaria, China, the Czech Republic, Egypt, Estonia, France, Georgia, Hungary, Iran, Ireland, Isle of Man, Jordan, Korea (South), Lebanon, Luxembourg, Malay sia, Malta, Mexico, Morocco, the Netherlands, Pakistan, Philip pines, Seychelles, Singapore, Sri Lanka, Syria, Thailand, Turkey, Turkmenistan, the United King­dom, Uzbekistan and Yemen.

Bahrain has signed tax treaties with Cyprus, Portugal, Sudan and Tajikistan, but these treaties are not yet in force.