Zahra Habib
The Foreign Affairs, Defense and National Security Committee of the Shura Council recommended approval of a draft law to ratify the agreement between the government of the Kingdom of Bahrain and the government of the Sultanate of Oman regarding the removal of double taxation and preventing evasion and avoiding taxes in relation to taxes on income, and facilities for Decree No. (12) of 2025.
The committee pointed out that the agreement comes within the framework of the established brotherly relations between the two countries, and within the results of the royal visit to His Majesty the King to the Sultanate of Oman in January 2025, where the agreement was signed to enhance economic and commercial cooperation.
According to the Ministry of Finance and National Economy, the volume of direct Omani investments in Bahrain amounted to 398 million US dollars in 2023, by 0.9% of the total foreign direct investment, while direct foreign investment flows to the Kingdom of Bahrain from the Sultanate of Oman (39.3) million US dollars during the same year. Note that the most important sectors in terms of the volume of foreign direct investment from the Sultanate of Oman are concentrated in both financial services and insurance, mining and quarry work, human health and social work, in addition to real estate and construction work, at a time when Bahraini non -oil exports to the Sultanate of Oman amounted to about 350.2 million dollars, compared to imports worth 137.5 million dollars.
The committee emphasized that the agreement supports the Kingdom’s obligations to international standards in the tax field, including the standards of the Organization for Economic Cooperation and Development (OECD), the Group of Twenty (G20), the Transparency and Information Exchange Forum (GFTEI), and the comprehensive framework to combat the erosion of the tax and profit transfer of profits.
The agreement includes 31 articles that define the permitted persons and taxes, and clarifies the provisions related to permanent installations, business profits, international transport, capital profits, income from jobs, stock profits, stations, and technical services fees, while organizing mechanisms for removing tax and information exchange.
According to the committee, the agreement does not impose any new taxes, and there are no changes in national laws, and no additional obligations are arranged, but rather contribute to strengthening the legal environment for the flow of investments. The Ministry of Foreign Affairs and the Bahrain Chamber of Commerce and Industry supported the agreement, as a positive step to expand economic cooperation, without granting preferential privileges that violate the principles of international investment. The committee concluded its recommendation to agree to the draft law, because of its role in developing economic relations, protecting investments and activating Gulf and Arab partnerships.
