China and Bahrain signed a Protocol to the China-Bahrain double tax treaty (DTT) (the Protocol) on September 16, 2013. In May 2016, China’s State Administration of Taxation (SAT) issued SAT Public Notice [2016] No.31 to announce that the Protocol entered into force on April 1, 2016 and will be applicable to the income derived on and after January 1, 2017.
The Protocol revises certain articles set out in China-Bahrain DTT signed in 2002. Key changes include:
- re-defining relevant concepts in the DTT, such as ‘chinese tax’, ‘competent authorities’, ‘resident of a contracting state’, etc.
- raising the restricted income tax rate levied on dividend derived by corporate beneficial owners from 5% to 10%
- clarifying the provisions of eliminating double taxation in China, and
- updating the Article of ‘Exchange of Information’ (EoI).
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