A Convention for the Avoidance of Double Taxation between Ireland and Bahrain was signed on 29 October 2009.

The Convention covers taxes on the income and gains of individuals and companies. It operates by either granting exclusive taxation rights to one or other country, or where the income or gain remains taxable in both, by providing that the country of residence of the taxpayer will relieve double taxation by allowing a credit for the tax paid in the other country.

The protocol to the convention contains provisions in relation to the residence of companies. It states that for the purposes of Article 4 (Resident) and Article 10 (Dividends) a company which is incorporated, or has its place of effective management in Bahrain shall be regarded as resident for tax purposes in Bahrain in applying S153 TCA 1997 (Distributions to non-residents) and S172D(3)(b)(i) TCA 1997 (Exemption from dividend withholding tax for certain non-resident persons) and to enable a certificate be given by the Bahrain tax authority for the purposes of Paragraph 9 Schedule 2A TCA 997 (Declaration to be made by qualifying non-resident person, being a company).

This is the first Convention that Ireland has concluded in the Gulf Region.

The treaty, which is not yet in force, can be downloaded from the Revenue website; www.revenue.ie.