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June 26, 2026

This Agreement between Bahrain and Iran covers taxes on income and capital, including Bahrain's income tax and Iran's income and property taxes. The treaty defines a permanent establishment, with a construction or assembly project lasting more than 12 months qualifying. It sets maximum withholding tax rates at 5% for dividends, interest (income from debt claims), and royalties paid to a resident of the other state. Interest paid to government bodies is exempt. Per Article 23, both states use the credit method for the elimination of double taxation. The agreement applies to international traffic by ship, aircraft, and road/railway.

Agreement between the Government of the KINGDOM OF BAHRAIN and the Government of the ISLAMIC REPUBLIC OF IRAN for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital

THE GOVERNMENT OF THE KINGDOM OF BAHRAIN AND THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF IRAN hereinafter referred to as the Contracting States;

Desiring to conclude an Agreement for the avoidance of double taxation with respect to taxes on income and on capital;

HAVE AGREED AS FOLLOWS:

Contents

Article 1 - Personal Scope

Article 2 - Taxes Covered

Article 3 - General Definitions

Article 4 - Resident

Article 5 - Permanent Establishment

Article 6 - Income from Immovable Property

Article 7 - Business Profits

Article 8 - International Traffic

Article 9 - Associated Enterprises

Article 10 - Dividends

Article 11 - Interest or Income from Debt Claims

Article 12 - Royalties

Article 13 - Capital Gains

Article 14 - Independent Personal Services

Article 15 - Dependent Personal Services

Article 16 - Directors' Fees

Article 17 - Artistes and Sportsmen

Article 18 - Pensions

Article 19 - Government Service

Article 20 - Teachers, Students and Researchers

Article 21 - Other Income

Article 22 - Capital

Article 23 - Method for the Elimination of Double Taxation

Article 24 - Non-Discrimination

Article 25 - Mutual Agreement Procedure

Article 26 - Exchange of Information

Article 27 - Members of Diplomatic Missions and Consular Posts

Article 28 - Entry into Force

Article 29 - Termination

Article 1
Personal Scope

This Agreement shall apply to persons who are residents of one or both of the Contracting States.

Article 1Personal Scope

Article 2Taxes Covered

Article 1
Personal Scope

Article 2
Taxes Covered