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Municipal Tax

Last activity 04 February 2013 by Leoinbahrain

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Leoinbahrain

Hello there everyone

I am looking for some advice regarding Municipal tax, when renting a villa I see some prices say excluding Municipal tax and some say inclusive, my employer is telling me that because they are the ones who will be renting the place for me to live and the transaction would be between two companies rather than an individual and the owner, then the tax is not paid, is this true?

Thanks in advance

Leonard

brightonguy

Because they are the ones who are giving you the property, they need to adhere the terms of the property owner. If the property owner chooses not to include the municipality tax, then your company doesn't pay. You have two options:
- Ask your employer to see if you can choose the property you stay. Let them know what is their budget for a property and try to stay within that limit.
- Negotiate to see if they can include the municipality tax in your accommodation allowance.
My company pays my accommodation allowance in cash and it's up to me what I do with that money - I can either spend it all or stay somewhere cheaper and spend the rest of the money. Maybe this model could work out for you too.

Josnuggles

It is much better to get the landlord of wherever you are staying to include the tax. It is much better value to rent a place that is all inclusive (water, elec, gas, tax all paid by landlord)

Brightonguy is absolutely correct (as usual) in his response. Talk to your employer and ask for the rent allowance to be paid into your salary so you can choose the place you will live in. If chosen by you it will obviously feel more of a home and not work accommodation

Good luck in your search - there are a lot of topics on the forum relating to properties and good areas to live so if you have the time try to read through the forum for a while.

Leoinbahrain

Hi, thanks for the replies, I am aware of the way that the inclusive and exclusive rents work and what you get and don't get in both the deals, I am aware that that inclusive means that everything is included but the problem arose when I looked at a property that was exclusive and when I included the municipal tax it took it over budget and when I spoke to my employer they mentioned that due to the contract being between them (one company) and the landlord (the other company) that the municipal tax was of required to be paid, they said it is only paid when the contract is between an individual and the landlord. I am asking if anyone knows if there is any truth in this or are my company getting the information wrong.

Thanks

Leonard

Josnuggles

My honest answer is I don't know but I would presume your company is correct as they will do this all the time.

Leoinbahrain

Thanks

brightonguy

I also don't know the absolutely correct answer to your question but based on what I found below, I don't see any reason for them not to pay it:

A municipal tax is payable by individuals or companies renting property in Bahrain. The rate of the tax varies according to the nature of the property, as summarised below:
- Rented commercial building – 10 per cent of rent
- Rented unfurnished residential building – 10 per cent of rent

Rented furnished residential building:
- Owner pays electricity, water and municipal tax – 7 per cent of rent
- Tenant pays electricity, water and municipal tax – 7.5 per cent of rent.

Based on a quick research I made, I see no mention of the situation you are in. Although this doesn't answer your question in full, I thought I should share.

Leoinbahrain

Thanks again for your help, it is much appreciated.

Leonard

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