Académique Documents
Professionnel Documents
Culture Documents
BETWEEN
THE GOVERNMENT OF
AND
THE GOVERNMENT OF
The Government of the Kingdom of Bahrain and the Government of the Republic of
Cyprus desiring to conclude an Agreement for the avoidance of double taxation with
respect to taxes on income;
Have agreed as follows:
Article 1
PERSONS COVERED
This Agreement shall apply to persons who are residents of one or both of the
Contracting States.
Article 2
TAXES COVERED
1.
2.
There shall be regarded as taxes on income all taxes imposed on total income
or on elements of income, including taxes on gains from the alienation of
movable or immovable property, and taxes on the total amounts of wages or
salaries paid by enterprises.
3.
The existing taxes to which the Agreement shall apply are in particular:
(a)
(b)
The Agreement shall apply also to any identical or substantially similar taxes
which are imposed after the date of signature of the Agreement in addition to,
or in place of, the existing taxes. The competent authorities of the Contracting
States shall notify each other of any significant changes that have been made
in their respective taxation laws.
Article 3
GENERAL DEFINITIONS
1.
For the purposes of this Agreement, unless the context otherwise requires:
(a)
(b)
the term Cyprus means the Republic of Cyprus and, when used in a
geographical sense, includes the national territory, the territorial sea
thereof as well as any area outside the territorial sea, including the
contiguous zone, the exclusive economic zone and the continental shelf,
which has been or may hereafter be designated, under the laws of
Cyprus and in accordance with international law, as an area within
which Cyprus may exercise sovereign rights or jurisdiction;
(c)
the terms a Contracting State and the other Contracting State mean
the Kingdom of Bahrain or the Republic of Cyprus, as the context
requires;
(d)
the term person includes an individual, a company and any other body
of persons;
(e)
the term company means any body corporate or any entity that is
treated as a body corporate for tax purposes or any other entity
constituted or recognised under the laws of one or other of the
Contracting States as a body corporate;
(f)
(g)
(h)
(ii)
(i)
2.
(ii)
(j)
(k)
1.
For the purposes of this Agreement, the term resident of a Contracting State
means:
(a) in the case of Bahrain, an individual who is a national of Bahrain and who
is present in Bahrain for a period or periods totalling in the aggregate at least
183 days in the fiscal year concerned, and a company or other legal person
which is incorporated or has its place of management in Bahrain;
(b) in the case of Cyprus, any person who, under the laws of Cyprus, is liable
to tax therein by reason of his domicile, residence, place of management or
any other criterion of a similar nature,
and also includes that State and any political subdivision or local authority
thereof. This term, however, does not include any person who is liable to tax in
that State in respect only of income from sources in that State.
2.
3.
(b)
(c)
(d)
Article 5
PERMANENT ESTABLISHMENT
1.
2.
a place of management;
(b)
a branch;
(c)
an office;
(d)
a factory;
(e)
a workshop;
(f)
(g)
a refinery;
(h)
(i)
3.
4.
5.
the use of facilities solely for the purpose of storage, display or delivery
of goods or merchandise belonging to the enterprise;
(b)
(c)
(d)
(e)
(f)
6.
7.
8.
Article 6
INCOME FROM IMMOVABLE PROPERTY
1.
2.
The term immovable property shall have the meaning which it has under the
law of the Contracting State in which the property in question is situated. The
term shall in any case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry, rights to which the
provisions of general law respecting landed property apply, usufruct of
immovable property and rights to variable or fixed payments as consideration
for the working of, or the right to work, mineral deposits, sources and other
natural resources; ships, boats and aircraft shall not be regarded as immovable
property.
3.
The provisions of paragraph 1 shall apply to income derived from the direct
use, letting, or use in any other form of immovable property.
4.
The provisions of paragraphs 1 and 3 shall also apply to the income from
immovable property of an enterprise.
Article 7
BUSINESS PROFITS
1.
2.
3.
4.
5.
6.
For the purposes of the preceding paragraphs, the profits to be attributed to the
permanent establishment shall be determined by the same method year by year
unless there is good and sufficient reason to the contrary.
7.
Where profits include items of income which are dealt with separately in other
Articles of the Agreement, then the provisions of those Articles shall not be
affected by the provisions of this Article.
Article 8
SHIPPING AND AIR TRANSPORT
1.
2.
For the purposes of this Article profits from the operation of ships or aircraft in
international traffic include profits from:
3.
a)
b)
c)
The provisions of this Article shall also apply to profits from the participation
in a pool, a joint business or an international operating agency.
Article 9
ASSOCIATED ENTERPRISES
1.
Where
(a)
(b)
and in either case conditions are made or imposed between the two enterprises
in their commercial or financial relations which differ from those which would
be made between independent enterprises, then any profits which would, but
for those conditions, have accrued to one of the enterprises, but, by reason of
those conditions, have not so accrued, may be included in the profits of that
enterprise and taxed accordingly.
2.
Where a Contracting State includes in the profits of an enterprise of that State and taxes accordingly - profits on which an enterprise of the other Contracting
State has been charged to tax in that other State and the profits so included are
profits which would have accrued to the enterprise of the first-mentioned State
if the conditions made between the two enterprises had been those which
would have been made between independent enterprises, then that other State
shall make an appropriate adjustment to the amount of the tax charged therein
on those profits. In determining such adjustment, due regard shall be had to
the other provisions of this Agreement and the competent authorities of the
Contracting States shall if necessary consult each other.
Article 10
DIVIDENDS
1.
2.
The term dividends as used in this Article means income from shares,
jouissance shares or jouissance rights, mining shares, founders` shares or
other rights, not being debt-claims, participating in profits, as well as income
from other corporate rights which is subjected to the same taxation treatment
as income from shares by the laws of the State of which the company making
the distribution is a resident.
3.
The provisions of paragraph 1 shall not apply if the beneficial owner of the
dividends, being a resident of a Contracting State, carries on business in the
other Contracting State of which the company paying the dividends is a
resident, through a permanent establishment situated therein and the holding in
respect of which the dividends are paid is effectively connected with such
permanent establishment. In such case the provisions of Article 7 shall apply.
4.
Article 11
INCOME FROM DEBTCLAIMS
1.
2.
The terms income from debtclaims or income as used in this Article mean
income from debt-claims of every kind, whether or not secured by mortgage and
whether or not carrying a right to participate in the debtor's profits, and in
particular, income from government securities and income from bonds or
debentures, including premiums and prizes attaching to such securities, bonds or
debentures. Penalty charges for late payment shall not be regarded as income for
the purpose of this Article.
3.
The provisions of paragraph 1 shall not apply if the beneficial owner of the
income, being a resident of a Contracting State, carries on business in the other
Contracting State in which the income arises, through a permanent establishment
situated therein and the debt-claim in respect of which the income is paid is
effectively connected with such permanent establishment. In such case the
provisions of Article 7 shall apply.
4.
5.
Where, by reason of a special relationship between the payer and the beneficial
owner or between both of them and some other person, the amount of the income,
having regard to the debt-claim for which it is paid, exceeds the amount which
would have been agreed upon by the payer and the beneficial owner in the
absence, of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State, due regard being
had to the other provisions of this Agreement.
Article 12
ROYALTIES
1.
2.
The term royalties as used in this Article means payments of any kind
received as a consideration for the use of, or the right to use, any copyright of
literary, artistic or scientific work including cinematograph films, computer
software, any patent, trade mark, design or model, plan, secret formula or
process, or for information concerning industrial, commercial or scientific
experience.
3.
The provisions of paragraph 1 shall not apply if the beneficial owner of the
royalties, being a resident of a Contracting State, carries on business in the
other Contracting State in which the royalties arise, through a permanent
establishment situated therein and the right or property in respect of which the
royalties are paid is effectively connected with such permanent establishment.
In such case the provisions of Article 7 shall apply.
4.
Where, by reason of a special relationship between the payer and the beneficial
owner or between both of them and some other person, the amount of the
royalties, having regard to the use, right or information for which they are
paid, exceeds the amount which would have been agreed upon by the payer
and the beneficial owner in the absence of such relationship, the provisions of
this Article shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the laws of each
Contracting State, due regard being had to the other provisions of this
Agreement.
Article 13
CAPITAL GAINS
1.
2.
Gains from the alienation of movable property forming part of the business
property of a permanent establishment which an enterprise of a Contracting
State has in the other Contracting State, including such gains from the
alienation of such a permanent establishment (alone or with the whole
enterprise), may be taxed in that other State.
3.
4.
Gains from the alienation of any property other than that referred to in the
preceding paragraphs, shall be taxable only in the Contracting State of which
the alienator is a resident.
Article 14
DEPENDENT PERSONAL SERVICES
1.
Subject to the provisions of Articles 15, 17 and 18, salaries, wages and other
similar remuneration derived by a resident of a Contracting State in respect of
3.
the recipient is present in the other State for a period or periods not
exceeding in the aggregate 183 days in any twelve month period
commencing or ending in the fiscal year concerned; and
(b)
(c)
Article 16
ARTISTES AND SPORTSMEN
1.
2.
Article 17
PENSIONS
Subject to the provisions of paragraph 2 of Article 18, pensions and other similar
remuneration paid to a resident of a Contracting State in consideration of past
employment shall be taxable only in that State.
Article 18
GOVERNMENT SERVICE
1.
2.
3.
(a)
(b)
(ii)
did not become a resident of that State solely for the purpose of
rendering the services.
(a)
Any pension paid by, or out of funds created by, a Contracting State or a
political subdivision or a local authority thereof to an individual in
respect of services rendered to that State or subdivision or authority
shall be taxable only in that State.
(b)
The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, wages and
other similar remuneration, and to pensions, in respect of services rendered in
connection with a business carried on by a Contracting State or a political
subdivision or a local authority thereof.
Article 19
STUDENTS
Payments which a student or business apprentice who is or was immediately before
visiting a Contracting State a resident of the other Contracting State and who is
present in the first-mentioned State solely for the purpose of his education or training
receives for the purpose of his maintenance, education or training shall not be taxed
in that State, provided that such payments arise from sources outside that State.
Article 20
OTHER INCOME
1.
2.
The provisions of paragraph 1 shall not apply to income, other than income
from immovable property as defined in paragraph 2 of Article 6, if the
recipient of such income, being a resident of a Contracting State, carries on
business in the other Contracting State through a permanent establishment
situated therein and the right or property in respect of which the income is paid
is effectively connected with such permanent establishment. In such case the
provisions of Article 7 shall apply.
Article 21
ELIMINATION OF DOUBLE TAXATION
In Bahrain:
there shall be allowed as a credit against Bahrain tax payable in respect
of any item of income derived from Cyprus the tax paid under the laws
of Cyprus and in accordance with this Agreement. The credit shall not,
however, exceed that part of the Bahrain tax, as computed before the
credit is given, which is appropriate to such items of income; and
(b)
In Cyprus:
Subject to the provisions of Cyprus tax law regarding credit for foreign
tax, there shall be allowed as a credit against Cyprus tax payable in
respect of any item of income derived from Bahrain the tax paid under
the laws of Bahrain and in accordance with this Agreement. The credit
shall not, however, exceed that part of the Cyprus tax, as computed
before the credit is given, which is appropriate to such items of income.
Article 22
NON-DISCRIMINATION
1.
2.
3.
4.
5.
6.
The provisions of this Article shall apply to taxes covered by this Agreement.
Article 23
MUTUAL AGREEMENT PROCEDURE
1.
Where a person considers that the actions of one or both of the Contracting
States result or will result for him in taxation not in accordance with the
provisions of this Agreement, he may, irrespective of the remedies provided by
the domestic law of those States, present his case to the competent authority of
the Contracting State of which he is a resident or, if his case comes under
paragraph 1 of Article 22, to that of the Contracting State of which he is a
national. The case must be presented within three years from the first
notification of the action resulting in taxation not in accordance with the
provisions of the Agreement.
2.
3.
4.
Article 24
EXCHANGE OF INFORMATION
1.
2.
3.
(b)
(c)
4.
5.
Article 25
MEMBERS OF DIPLOMATIC MISSIONS AND CONSULAR POSTS
Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic
missions or consular posts under the general rules of international law or under the
provisions of special agreements.
Article 26
ENTRY INTO FORCE
1.
Each of the Contracting States shall notify to the other the completion of the
procedures required by its law for the bringing into force of this Agreement.
The Agreement shall enter into force on the date of receipt of the later of these
notifications.
2.
(b)
In Bahrain:
(i)
(ii)
In Cyprus:
(i)
(ii)
1.
2.
In Bahrain:
(i)
(ii)
(b)
In Cyprus:
(i)
(ii)