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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Bahrain

This report for Bahrain has been published on 12 Sep 2011. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Underlying documentation is not expressly required to be kept for financial trusts. In addition, whereas financial trusts have to maintain books and records, there is no express obligation for licensed trustees of Bahraini financial trusts to keep these books and records for a minimum period of time in all cases.  Bahrain should ensure that financial trusts maintain underlying documentation. Additionally, Bahrain should also ensure that financial trusts maintain all their accounting documents for five years or more. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The inter-governmental procedure that organises the access to foreseeably relevant information in Bahrain for exchange of information purposes is implied from the status of treaties under Bahrain’s Constitution rather than a clear statutory provision, and has not been tested in practice.  Bahrain should introduce express statutory provisions dealing with access to information for exchange of information purposes. 
The Financial Trust Law does not provide for exceptions to its secrecy provisions for EOI purposes. It is unclear whether the confidentiality provision of the Financial Trust Law may be overridden for the purpose of international exchange of information for tax purposes.  Bahrain should ensure that its domestic law provisions regarding confidentiality or secrecy duties, in particular regarding access to information on trusts, do not prevent effective exchange of information for tax purposes. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   There are explicit confidentiality rules in Bahrain’s tax laws that apply to the Minister of Finance. While these may be overridden either by the direct application of a tax treaty or be rendered inapplicable where the information is obtained through another authority, this is not unambiguously established under the law.  Bahrain should amend its law so that it expressly provides that the competent authority can exchange tax and accounting information on Bahraini taxpayers without their approval. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   A significant number of agreements and protocols containing exchange of information mechanisms signed over the past 18 months have not been ratified by Bahrain.  Bahrain should ensure that its agreements and protocols containing exchange of information mechanisms are ratified and brought into force as quickly as possible. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.   Bahrain is actively negotiating a number of new TIEAs, DTCs and protocols.  Bahrain should continue to develop its network of EOI mechanisms (regardless of their form) with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.