Tax Facts - Bahrain

 

Introduction

Like most of the Middle East states the Bahraini Government receives most of its revenues from the oil industry.

Tax Year

Not applicable.

Assessment Basis

Not applicable, there is no requirement to file income tax returns.

Income Tax

There is no income tax per se in Bahrain but in June 2007 the Bahraini Government introduced a 1% ‘social insurance tax’ on the salaries of both Bahraini nationals and expatriates living in the state to help fund unemployment benefits for all workers.

Taxation of Investment Income

There is no withholding tax in Bahrain.

Tax on Property Rental Income

There is no tax on rental income in Bahrain.

Wealth Taxes

There are no wealth taxes in Bahrain.

Capital Gains Tax

There is no capital gains tax in Bahrain.

Inheritance and Gift Tax

There is no inheritance tax in Bahrain.

Regional and Municipal Taxes

A municipal tax is payable by individuals or companies renting property in Bahrain. The rate of the tax varies according to whether the property is unfurnished residential property, furnished residential property or commercial property.

Property Taxes

There are no property taxes in Bahrain.

Stamp Duty/Transfer Tax

There is no stamp duty in Bahrain.

Sales Tax

 

The only sales tax is one on gasoline, which is levied at a rate of 12%.

Social Security Contributions

 

Employers who employ more than 10 employees, irrespective of their nationality, must pay up to 10 percent of the employee's gross income to social welfare taxes. The employer's contribution is split:

  • Seven percent towards insurance against old age, disability and death (applicable only to Bahraini employees) and
  • Three percent of gross wages towards insurance against employment injuries (applicable to all employees).

Employees contribute five percent of gross salary towards insurance against old age, disability and death (applicable to Bahraini employees only)

 

Gerard Associates Ltd. does not provide individual tax advice, and nothing contained in this briefing should be construed as such.

We make every effort to ensure the accuracy of the information but cannot be held responsible for any liability arising. It is essential that all clients seek tax advice specific to their own personal circumstances with the relevant tax professional of the jurisdiction(s) in which you are liable to tax.

This has been prepared based on our understanding of current legislation and tax practice. However, these are subject to change, and may result in income tax consequences different from those detailed below. We cannot accept responsibility for its interpretation or any future changes to law.