BeautyMaven

Hi all,

Just about to sign on the dotted line but confused about this clause entitled 'Taxes & Permits'

''The Employee shall bear the cost of any dues, levies and taxes imposed by any applicable governments on individuals. Such dues, levies and taxes shall, where required, be deducted from the Employee’s Basic Salary and Benefits and Allowances according to applicable regulations. The Employee shall also be liable to pay his own portion of pension or social insurance, if any, in accordance with applicable laws and regulations. The Employer shall bear the costs of all visas, permits and related documents associated with his employment.''

We were informed that BH is tax free by both people we know and the prospective new employer. Can anyone shed a light on what this clause means?

Any help appreciated

Tockalosh

I will check with our HR bloke tomorrow morning but believe it may be a standard statement for your prospective company because of the "if any" in the clause.
I have diddly squat deductions and dont know of anyone else paying anything either

Millhouse

In Bahrain, as in the UAE, there are income and corporation tax laws. The rate is zero. One day it might not be, all that is saying is that when/ if the tax rate rises then you pay. no big deal.

Bonny Boy

It's also saying if you owe tax anywhere else ('any applicable governments'), it is your responsibility to pay this.

eg If you are a US citizen, above a certain limit you have to pay tax to Uncle Sam, and that would be down to you, out of your salary.

Most longish term Brit expats, if they satisfy the various criteria, don't have to send tax money to Uncle Gordon.

Jeeper

Bahrain introduced a 1% income tax when I lived there 3 years ago.....I presume it got dropped and no one I know payed it.

norsk

Someone told me some time ago that there is in fact a 5% income tax in Saudi today, but that the companies are paying it on behalf of the employees..

I have the same tax clause as you're talking about and if the company stopped paying my tax for me I would expect a raise to cover the decrease in takehome pay...if not I would be leaving very quickly....

The Dean

As others have suggested, it simply means that if tax is introduced, you must pay it, and they won't increase your salary to offset it.

I pay BHD 40 (GBP 70 approx) per month in social security deductions (or something), but that's all.

And by the way, if the eyes in your avatar are really yours, please PM me when you get here.........

alighor

The information provided by most people in the thread is incorrect.

There is a so called "unemployment" tax of 2%, equally shared between employer and employee. Basically, it means you do have income tax (1%).
http://en.wikipedia.org/wiki/Economy...hrain#Taxation

BeautyMaven

Thanks guys for all the responses, to be honest we suspected it was a clause to cover any future tax changes but you never know.. waiting for the official response from new employer just to clarify everything.

Another question: they are providing 'standard accomodation' for us in BH, which we can pick ourselves out of a selection of 4-6 places just before we move. Office is in Manama, and have read about Saar, Amwaj etc but is there any areas we should avoid specifically?

The Dean - they may be my eyes and i'll let you know when we get there but my husband will be along with me! By the way, did you get a chance to ask your friend about working as a MUA over there?

Welivehere

Not really IMO. It might be an idea to try and locate near where work will be though... Although trafffic is not bad here if you can avoid it why woudn't you.....

norsk

Surely that's a bit harsh when all you're saying is that one detail is wrong...

The Dean

I don't pay that - for certain.

alighor

The 'one detail' is what the discussion is about: The claims made by some that there is no form of taxation is incorrect.

If you are employed by a company registered in Bahrain under Bahrain's Labour Law, you are paying it, either deduced from your salary and paid by your employer and not specified on your salary specification hence you not knowing about it or noticing it or deduced from your salary and paid subsequently (i.e. specified on your salary specification).

The only way you would not pay it is that your company does not operate under Bahraini law (there are certain cases where that could apply).

What you referred to above as 'social insurance' might be it (not sure about it). They avoid calling it a income tax and have interchangeably referred to it as a social insurance fee, unemployment fee, etc.

More info: http://www.infinsolutions.com/downlo...1196237539.pdf

norsk

Okay fair enough, but your posting gave the impression that all the info shared by everyone on the thread was all incorrect and this clearly isn't the case.

Also it helps if you provide the information to back up your statements straight away rather than wait for people to protest...

camel jockey

What alighor says is correct. There is no income tax in Bahrain but every employee (be it Bahraini or expat) has to pay 'GOSI' (General Organisation of Social Insurance). Expats only pay 1% of their basic salary, and even then depending on the employer - the employer may pay this on the employee's behalf, this is why some are unaware that such a 'tax' even exists. My employer does not bear the cost of this and it is automatically deducted out of my salary every month. GOSI basically is a pension scheme here. As guests of the country expats only pay 1% to top up the fund but I believe that nationals pay 17% every month (this is the figure that I remember of the top of my head!).