On October 29, Ireland’s Minister of State at the Department of Finance, Martin Mansergh, and Ahmed bin Mohammed Al Khalifa, Bahrain’s Minister of Finance, signed a convention for the avoidance of double taxation and fiscal evasion with respect taxes on income and on capital.
The convention is expected to have a positive impact on trade and investment between Ireland and Bahrain.
Commenting on the signing, Mansergh announced that:
“The signing of this convention is significant in that it is the first convention that Ireland has concluded in the Gulf Region and therefore represents an important addition to Ireland’s existing network of double taxation treaties”.
He continued: “This taxation agreement coupled with a possible Memorandum of Understanding on Economic Trade and Technical Cooperation will assist even greater links between our two countries.”
The convention covers taxes on the income and gains of individuals and companies. It operates by either granting exclusive taxation rights to one or other country, or where the income or gain remains taxable in both, by providing that the country of residence of the taxpayer will relieve double taxation by allowing a credit for the tax paid in the other country.
The absence of withholding taxes on dividend, interest and royalty payments will be important in facilitating business and investment flows between both countries.
Lastly, the convention will protect nationals of each country from discriminatory tax provisions and will provide for the exchange of information between the respective countries’ tax authorities and aid in the fight against tax evasion.
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