On July 15, 2026, the Jersey Government announced that the Double Taxation Agreement (DTA) between Jersey and Bahrain entered into force on June 3, 2026. The agreement was originally signed on September 15, 2025, and will take effect from January 1, 2027, for withholding taxes and for taxable periods beginning on or after January 1, 2027, for all other covered taxes.
The Jersey Government confirmed that the DTA with Bahrain entered into force following the completion of the required ratification procedures in both jurisdictions. The agreement is intended to strengthen economic ties between Bahrain and Jersey by providing greater tax certainty and reducing the risk of double taxation for cross-border activities.
Although the treaty is now in force, it will take effect from January 1, 2027. The DTA will apply to withholding taxes from that date and to taxable periods beginning on or after January 1, 2027, for all other taxes.
Key Details:
The entry into force of the Bahrain-Jersey DTA represents a positive step for organizations with employees, operations, or investments spanning both jurisdictions. The treaty is expected to enhance tax certainty, support cross-border business activity, and provide a framework for addressing instances of double taxation.
While Bahrain does not currently impose personal income tax on employment income, employers should nevertheless consider the potential implications of the treaty on their broader cross-border tax position, including corporate tax considerations, employee mobility arrangements, treaty residency positions and compliance obligations.
With the treaty becoming effective from January 1, 2027, organizations have an opportunity to review existing structures and operating models to identify any planning opportunities and ensure readiness for the treaty’s application.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Anir Chatterji
Partner
Jammy Mustafa
Director
Cody Reeves
Senior Associate
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