Tax In Bahrain

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Bahrain is complying with the country’s tax system. As well as paying tax in Bahrain, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Bahrain under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Bahrain for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Bahrain, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Bahrain through PAYE is left with the prospect doing everything themselves.

Do you know much about Bahraini Tax Law? Does Bahrain have a tax treaty with your home country? You will need to find out or find someone who can help!

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Bahrain, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Bahrain are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Bahraini umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Bahraini taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Bahraini tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Bahrain, many of whom are experts in tax and immigration laws. If you have any questions about tax in Bahrain, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Bahraini work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Bahrain but without the overhead of directly dealing with the Bahraini tax authorities. Get in touch with us today for some reliable advice on tax in Bahrain!

When Do You Need to Lodge Your Tax Return?: 
N/A
Tax Filing Deadline : 
N/A
Can you file it online? : 
N/A
Currency: 
Bahraini Dollar (BHD)
Tax-free Threshold in: 
N/A
How long does it take to set up: 
9-10 days
How much does it cost: 
BHD87
Is it easy? : 
Starting a Business Rank: 75/190 (Source: World Bank)
How to File Taxes in: 

You do not need to file taxes in Bahrain as there are no personal income taxes.

Notes: 

Social Security: Bahraini employees are required to make 7% contribution (which covers old age, disability, death and unemployment). Expatriate employees are required to make a 1% contribution (which covers unemployment). The maximum monthly earnings subject to contributions are capped at BHD4,000.

Does the 183 day rule apply in: 

No

When do you become a tax resident in: 

Residence is not defined for personal income tax purposes in Bahrain, as there are no taxes on personal income in Bahrain.

Am I taxed on my global income in: 

No

Client comment

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Shell International Trading & Shipping