Bahrain bags top global tax transparency rating

Bahrain is fully “compliant’ with the internationally agreed tax transparency and exchange of information standards, according to the Global Forum on Transparency and Exchange of Information for Tax Purposes. In its latest review by the Global Forum, which ranks countries by its ability to exchange information for tax purposes, the Kingdom is rated high also for the first time in the region. In 2013, Bahrain was considered only “largely compliant”. The Global Forum completed its first round of peer reviews in 2016.

The first review looked into the legal and regulatory framework of countries, while the second review evaluated the extent to which the regulations were implemented. Each essential element is rated as “compliant”, “largely compliant, “partially compliant”, or “non-compliant”. In this round, the Global Forum completed 268 peer reviews and assigned compliance ratings to 119 jurisdictions that have undergone both Phase 1 and Phase 2 reviews or the Fast-Track Review procedure.

The review considers the ability to exchange ownership information, accounting records, bank information, access powers, rights and safeguards, network of agreements, and confidentiality among others. “This rating, the first in the region, enhances Bahrain’s status as a leading financial centre,” said Rana E. Faqihi, Assistant Undersecretary Assistant Undersecretary for Development and Revenue Policies at the Ministry of Finance. The Global Forum has approved Bahrain’s Second Round Exchange of Information on Request Peer Review Report with an overall rating of “Compliant”.

Rana E. Faqihi stressed that the ratings based on the second round of review leave a positive impact on the financial and banking sector in Bahrain. The United States, United Kingdom, Philippines, Japan, Indonesia, India, Germany, Cayman Islands, Canada, Brazil, Austria, Australia are some of the other major nations in the group. They are rated as “Largely Compliant” as per the second Round of EOIR peer reviews, which is ongoing.

During the nine-month-long evaluation process, the Global Forum thoroughly assessed Bahrain’s ability and effectiveness in exchanging tax information on request with its treaty partners. Bahrain has signed 50 bilateral exchange of information mechanisms, of which 48 are in force, along with the multilateral Convention on Mutual Administrative Assistance in Tax Matters, which entered into force for Bahrain on 1 September 2018.