Bahrain: no income tax confirmed for 2026

Bahrain applies no general tax on personal income or corporate profits, and no withholding tax. The applicable rate is 0%¹ for individuals and 0%² for companies.

This position is stated by the kingdom's administration with a clarity its neighbours do not always show, and it is long-standing.

Two exceptions remain. The hydrocarbons sector, which is subject to its own long-standing regime. And the global minimum tax, introduced for multinational groups within its scope.

This second exception marks the end of the principle's absolute character: a State that writes a tax on profits into its law, even one confined to very large groups, now has the instrument at its disposal.

We do not publish the tax residency criteria used under Bahraini law or the conditions for issuing a certificate: they do not appear in the sources we were able to consult. Yet this is the document on which the application of any treaty depends.

The real tax burden falls on consumption. A value added tax has applied at the standard rate of 10%³ since 1 January 2022.

Bahrain was the first Gulf State to introduce it, then the first to double its rate. This track record is the most reliable signal available on the direction of public finances in the region.

The kingdom is the least resource-rich in the region and the most dependent on its neighbours. It therefore had to act before them, and its path probably foreshadows theirs.

Qatar has not yet introduced this tax — its rate remains 0%⁴ — but itself presents this situation as transitional.

For a household, this difference is not marginal: a tax at this level weighs on all everyday consumption, in a country where almost everything is imported.

There is also an item that the absence of income tax does not offset: health insurance, compulsory for the residence permit, whose cost rises steeply with age. There is no public alternative for foreign nationals, which makes it an unavoidable expense.

The kingdom has opened a self-standing residence route based on property ownership, open to owners of a property worth at least BHD 50,000⁵, or around about $132,000⁶.

This threshold is an order of magnitude lower than in the Emirates, where it stands at from AED 2,000,000⁷, or in Qatar, at QAR 730,000⁸. This is the main argument for the Bahraini scheme.

Two caveats apply: the property must be located in an area open to foreign ownership, and keeping it is a condition for retaining the permit.

The market is also narrow, concentrated in a few developments, and its liquidity depends on a small pool of buyers — part of whom come from Saudi Arabia, to which the island is linked by a causeway.

1. The absence of direct taxation is confirmed, but it already has two exceptions.
2. The consumption tax has doubled since its introduction: the trend runs in one direction.
3. The property entry threshold is the lowest in the region, subject to the area.
4. A residence permit is not a certificate of tax residency.
5. A French national whose household or centre of economic interests remains in France stays domiciled there.

For a long-term project, the conclusion is clear: the absence of direct taxation in the Gulf is real today but is no longer a structural given. It is shifting towards consumption, which hits residents every day and whose rate does change. It is this trajectory, rather than the confirmation of a zero rate, that is worth following.