United Kingdom - Bahrain Tax Treaty

Once in effect, the tax treaty signed 10 March 2010, provides for a general exemption for dividends. A 15% tax rate will apply (where the beneficial owner is not a pension scheme) to dividends paid out of income derived directly or indirectly from certain immovable property by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempted from tax.

Interest will be tax exempt if:

(1) it is paid by a bank in the ordinary course of its banking business, on a quote Eurobond or by a contracting state, one of its political subdivisions, local authorities or statutory bodies; or

(2) provided the arrangement is not part of a back-to-back or similar loan, it is beneficially owned by an individual, pension scheme, certain qualifying unrelated financial institutions, a company in whose principal class of shares there is substantial and regular trading on a recognized stock exchange, a company less than 25% of whose shares or other rights are owned, directly or indirectly, by persons who are not residents of that other state or the other state itself, one of its political subdivisions, local authorities or statutory bodies.

If no exemption is available, interest will be subject to the domestic withholding tax rate. Royalties will be exempt.