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Tax Residency Certificate

Last activity 10 September 2021 by XTang

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Alienn

Can somebody please advise how to obtain a Residency Certificate in Bahrain and how long it usually takes. Many thanks.

XTang

What do you need it for exactly?

Because for most things, you can state that Bahrain doesn't issue TINs or tax identity numbers.

Neemish

Some countries ask for tax residency certificates.

Please contact Foreign Tax Relations Directorate at National Bureau for Revenue (NBR) who is dealing with VAT. Send an email to them. They will respond back with all requirements.

They will check with NPRA and issue the certificate.

Alienn

I thought of applying for it because it conclusively establishes that the person is tax resident in Bahrain. Also when I browsed NBR's website they seem to imply that they will consider issuing it subject to fulfillment of eligibility conditions but only if some authority or institution like a bank asks for it. I don't understand why this condition has been put by NBR. That is the reason I want to know if anyone on the forum has experience in getting it. Thanks to everyone for the response and views.

Neemish

Just explain to NBR why it is required and which bank or institution has asked for it. If they ask for a request letter from them, that's a protocol.

Even applying for a Police clearance certificate, for some purposes they ask for a letter from the requesting authority and you cannot avoid it.

XTang

As I said before, it really depends on what you need it for.  For example:

1) If you deal with offshore banking and transaction fees, a standard CRS declaration with Bahrain residence and ID card will establish tax residency
2) The same will also work for filing tax returns in most jurisdictions e.g. I file taxes under both my nationalities and never had to provide a tax residency certificate (as non-residence doesn't usually need to be established for individuals)

You would need it if you are deriving income in a different jurisdiction but want to escape taxes by assigning tax residence to another jurisdiction.

Having said that, I have had to provide it once for a cross-border financial structure.  And yes, I had to provide a letter from the entity.  The reason, as I understood it, based on chats with them, is two fold, one to discourage unnecessary requests (as I mentioned, for many things you don't need it) and second, this is relatively sensitive information from the perspective of compliance in the financial markets i.e. FATF, FATCA, OECD guidelines etc., which institutions world-wide will rely on....which leads to bureaucrats everywhere wanting to cover themselves :).

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