Korea-Bahrain Tax Treaty

Korea-Bahrain Tax Treaty came into effect

 

The governments of Korea and Bahrain agreed to conclude the Korea-Bahrain tax treaty by exchanging ratification of tax treaty on April 11, 2013, and the tax treaty became effective from April 26, 2013.

The main provisions of the Korea-Bahrain tax treaty are as follows.

 

■ Permanent Establishment (Article 5)

A building site or construction or installation project constitutes a permanent establishment only if it lasts more than 12 months.

 

■ Reduced withholding tax rates (Article 10~12)

① Dividends: 10% [5% if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends]  

② Interests: 5%

③ Royalties: 10%    

■ Exchange of taxation information (Article 25)

The Korean and Bahraini tax authorities can request each other financial and taxation information for a suspect of tax evasion.