Bahrain has no personal income tax—expats and locals both keep 100% of their salary. However, GOSI (social insurance) applies: Bahraini employees pay 8% (employer adds 14%), while GCC nationals pay their home country rates. Expats pay just 1% (unemployment insurance; employer-side contributions are separate and no pension is due). 10% VAT was introduced in 2022. Bahrain has no capital gains tax, no inheritance tax, and no withholding tax. Corporate tax is limited to oil companies (46%) and foreign banks (currently 0%, but 15% global minimum tax coming). Golden Residency visa allows long-term stay without employer sponsorship. Cost of living is lower than UAE or Qatar. Use our calculator to compare Bahrain with taxable countries.
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No personal income tax applies in Bahrain—zero for both Bahraini citizens and expats. You keep 100% of your gross salary (minus GOSI social insurance). This has been consistent since Bahrain's founding. Unlike UAE which introduced corporate tax in 2023, Bahrain has no plans to introduce personal income tax.
GOSI (General Organisation for Social Insurance) provides retirement, disability, and death benefits. Bahrainis pay 8% of salary (employer adds 14%, plus 3% hazard levy). GCC nationals pay their home country rates. Expats contribute only 1% as employee (unemployment insurance) and pay no pension contribution; employer-side contributions are separate.
Bahrain introduced 5% VAT in 2019, increased to 10% in January 2022. VAT applies to most goods and services. Zero-rated items include basic food, education, healthcare, and exports. Financial services are exempt. Businesses with turnover above BHD 37,500 must register. Lower than UAE and Saudi Arabia's 15%.
Bahrain has no general corporate income tax. The only exception: oil and gas companies pay 46% on net profits. Foreign banks currently pay 0% but this will change under OECD Pillar Two (15% global minimum tax). No withholding tax on dividends, royalties, or interest. Makes Bahrain attractive for regional headquarters.
Bahrain's Golden Residency (launched 2022) allows foreigners to live and work without employer sponsorship. Three categories: investors (BHD 100,000+ investment), talent (specialized professionals), and retirees (proven pension income). Grants 10-year renewable residency. Similar to UAE's Golden Visa but lower threshold. Includes family sponsorship rights.
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Last Updated: October 2026