25.11.2019
On 23 November 2019 in Manama, Switzerland and Bahrain signed a double taxation agreement (DTA) in the area of taxes on income and capital.
Under the agreement, dividends can be taxed at a maximum rate of 15% in the source state, for example. Dividends from significant interests can be taxed at a maximum rate of 5% in the source state. Interest and royalties are taxable solely in the recipient's state of domicile.
In addition, the agreement contains an administrative assistance provision in accordance with the international standard concerning the exchange of information upon request, and an anti-abuse provision in accordance with the recommendations from the BEPS project of the G20/OECD. The abuse provision refers to the main purpose of an arrangement and is thus intended to prevent the DTA from being abused.
The cantons and business associations concerned welcomed the conclusion of the DTA with Bahrain. Before the agreement can enter into force, it has to be approved by Parliament in Switzerland and the necessary approval procedure has to be carried out in Bahrain.
Address for enquiries:
Bilateral Tax Issues and Double Taxation Treaties Section, State Secretariat for International Finance SIF
Tel. +41 58 462 71 29, dba@sif.admin.ch