Barbados and Bahrain signed the Barbados Bahrain Double Taxation Agreement on December 3, 2012 in Manama, Bahrain. Both countries are continuing to expand their tax treaty networks to further enhance their economies by facilitating international business and investment.
The Barbados Bahrain tax treaty was signed by Sheikh Ahmed bin Mohammed Al-Khalifa , the Kingdom of Bahrain’s Minister of Finance, and by Senator Maxine McClean, Barbados’ Minister of Foreign Affairs and Foreign Trade.
Double Taxation Agreements (DTAs) remove double taxation on enterprises operating and investing in a country’s tax treaty partner. They also outline and limit the withholding tax rates that can be applied to dividends, interest and royalties paid from a company in one country to one in the other.
In addition, the Barbados Bahrain DTA facilitates the exchange of information relating to tax matters between partners which will foster an environment of tax transparency and help to prevent tax avoidance and evasion. These measures fulfill the Organisation for Economic Cooperation and Development’s (OECD) international standard on exchange of information for tax purposes and strongly demonstrates both Barbados’ and Bahrain’s desire to ensure full compliance with these standards.
It was also noted that Barbados and Bahrain had recently concluded a Bilateral Investment Treaty, which is also known as an Agreement for the Reciprocal Promotion and Protection of Investments. This treaty was currently being prepared for signature. Once ratified, this agreement would help to further enhance business and investment between the two countries.
Bilateral Investment Treaties are used to encourage investment to flow between partner countries by guaranteeing the free transfer of investment and returns. Equally important, Bilateral Investment Treaties guarantee protection of these investments and assets from expropriation. The Treaties provide for the use of independent international arbitration to resolve disputes. With these measures and guarantees in place, investors in both countries, as well as international investors who wish to use either country as a conduit for investment in the other, will be able to invest with confidence.
Barbados plans to continually expand its tax treaty network in order to be the world’s leading international business destination. The island’s large network makes it a useful conduit through which international business and investment flows as it moves around the globe. This network also offers transparency and provides for information exchange in relation to tax matters, enhancing Barbados’ strong stance on both transparency and compliance with international tax standards.