Bahrain is the lowest tax jurisdiction within the Gulf and has no taxation or any taxation collection systems (as opposed to zero-rating) and does not have any ring-fenced ‘free zones’ – it treats all individuals and companies exactly the same.
Direct taxation:
- No corporation taxes
- No personal income taxes*
- No wealth taxes or tax on capital gains
- No withholding taxes
- No death duties or inheritance tax
- No restriction on repatriation of capital, profits or dividends
*There is a one per cent contribution to unemployment insurance
Indirect taxation:
- 12% on petrol – the cost of petrol is 100 fils (US$ 0.26) per litre (including the tax)
- 3% levy on hotel bills
- 10% municipal tax on rents
Social security:
All staff are required to be registered with the General Organisation for Social Insurance (GOSI) and contributions are:
- For Bahraini employees: employer pays 10% of basic salary and recurring constant allowances, employee pays 5% of basic salary and recurring constant allowances
- For expatriate employees: employer pays 3% of basic salary and recurring constant allowance