Bahrain, Malta sign convention to avoid double taxation

Manama: Bahrain and Malta on Monday signed a convention to avoid double taxation and prevent fiscal evasion  with respect to taxes on income.

The convention, signed by Shaikh Ahmad Bin Mohammad Al Khalifa, the minister of finance, and Tonio Fenech, the minister of finance, economy and investment, eliminates the double payment of taxes by nationals and enterprises of each country in the territory of the other.

It applies to taxes on income imposed by each country or its political subdivisions or local authorities, irrespective of the manner in which they are levied.

The Convention is Bahrain’s 18th such treaty that complies with the standard on exchange of tax information set by the Organisation for Economic Co-operation and Development (OECD) and endorsed by the G20 London Summit in April 2009.

It regards as taxes on income all taxes imposed on total income or on elements of income, including taxes on gains from the alienation of movable or immovable property and taxes on the total amounts of wages or salaries paid by enterprises, the two parties said.

It also applies to any identical or substantially similar taxes that are imposed after the date of signature of the convention in addition to, or in place of, existing taxes. Competent authorities in the two countries are to notify each other of any significant changes in their taxation laws.

Both countries said that the signing was a step forward to develop bilateral co-operation in tax and economic matters and that they looked forward to increased co-operation in financial, economic and investment sectors.

The signing of this convention means that Bahrain has signed a total of 29 double taxation treaties of which some 20 treaties are already in force, Bahrain’s finance ministry said.