| Bahrain Income Tax There is no personal income tax in Bahrain. There is also no Value Added Tax in Bahrain, except for gasoline. Social security contributions are payable.
Wealth Tax: Religious Wealth Tax (Zakat) is not levied in Bahrain.
Capital Gains Tax: There is no capital gains tax in Bahrain.
Inheritance and Gift Tax: There is no inheritance tax in Bahrain.
Bahrain Social Security (GOSI): Employees in Bahrain contribute 5% of gross salary towards insurance against old age, disability and death (applicable to Bahraini employees only).
Tax Year: Tax year is the calendar year.
Bahrain Corporate Tax RateThere is no corporate tax in Bahrain. Bahrain corporation tax system taxes only income of oil companies at a flat tax rate of 46%.
Oil companies are subject to tax on any profits generated from exploring for, producing, or refining oil in Bahrain regardless of the company's place of incorporation. The tax rate is 46% of net profits for each tax accounting period. An estimated income tax declaration must be filed on or before the fifteenth day of the third month of the tax year. Tax is payable in twelve equal instalments starting on the fifteenth day of the month after the declaration has been filed.
In the absence of taxation in Bahrain, the taxability of corporate profits of subsidiaries or branches of foreign banks operating in Bahrain would depend on whether there are bilateral treaties for the avoidance of double taxation with the country in which the branch's head office state is incorporated.
In all other Gulf Corporation Council (GCC) countries, there is some form of taxation on business profits (personal income taxes are still very rare). The taxability of the profits of a Bahrain bank derived from any of the other GCC countries would depend on whether the underlying banking activity was 'offshore' or 'onshore' in relation to this country. As a general rule offshore activity is exempt from tax, whereas onshore activity is taxable.
Tax Year: Tax year is the calendar year.
Other Taxes in Bahrain
Companies with more than 50 employees must either provide an 'approved training scheme', or pay a training levy of 1% of Bahraini employee salary and 3% for foreign employees.
A 10% municipality tax is levied on the rental of commercial property and residential property occupied by expatriates. The rate of the tax varies according to the nature of the property, namely: unfurnished residential property, furnished residential property and commercial property.
In addition, a 5% government levy on gross turnover is imposed on hotel services and entertainment.
Bahrain Social Security (GOSI):
Employers in Bahrain who employ more than 10 employees, irrespective of their nationality, must pay up to 10% of the employee's gross income to social welfare taxes. The employer's contribution is split:
1) 7% towards insurance against old age, disability and death (applicable only to Bahraini employees)
2) 3% of gross wages towards insurance against employment injuries (applicable to all employees)
Bahrain Sales Taxes / Value Added Tax (VAT)There's no Sales Tax or Value Added Tax in Bahrain. The only sales tax is one on gasoline, which is levied at a rate of 12%.
| 
