A Double Taxation Agreement between the United Kingdom and the Kingdom of Bahrain was signed on 10 March 2010.

The Agreement generally follows the OECD Model Double Taxation Convention, and important features include:

• The latest OECD provision on exchange of information
• Zero rate of withholding tax on dividends (except for REITs) and on royalties
• Zero rate of withholding tax on interest but with a provision to ensure the benefits of the interest article can only flow to residents of the other state.

The text of the new Agreement can be accessed at http://www.hmrc.gov.uk/international/signed.htm

The Agreement enters into force once both countries have completed their legislative procedures. The provisions of the Agreement will then take effect from the next calendar year.