Bahrain has agreed to share financial information of expatriates and foreign companies from the European Union to avoid being blacklisted as a tax haven.

Parliament yesterday voted in favour of two international agreements drafted by the Organisation for Economic Co-operation and Development (OECD) and the G20.

Both agreements, which go hand in hand, focus on administrative assistance and the sharing of information regarding the finances of expatriates and businesses with their countries of origin to ensure they are paying their taxes.

So far 98 countries have signed the agreement including Saudi Arabia, Kuwait and the UAE, said MP Abdulrahman Bu Ali during yesterday’s weekly parliament session.

“If someone asked me if there are any financial burdens to these two agreements then I would say no, Bahrain just has to pay a token fee,” said Mr Bu Ali.

“However, if we do not sign the agreements there will be severe repercussions for countries that do not share information on taxes.”

The fee that comes with signing the agreements is a combined $17,000.

However, during debate MPs asked for clarification on some of the terms in the agreements which they described as pressure tactics to threaten countries into signing.

“There should not be any fees even if it is a token amount because this is supposed to be co-operation,” said MP Abdulhameed Ahmed.

“However, if t share here are pressures, if they say if you do not join you will be counted as a terrorist country and blacklisted, then this is not international co-operation it is international pressure on Bahrain.”

The GDN reported earlier this month that EU states were set to remove Bahrain, the Marshall Islands and Saint Lucia from a list of tax havens that was issued in December last year.

All three are to be delisted after they made “specific commitments” to adapt their tax rules and practices to EU standards.

The jurisdictions that remain on the blacklist are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.

“(The agreement) is a universal system of information exchange so that countries can know where the money of their citizens living abroad is coming from and if they are not paying their taxes,” explained Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa during debate on the agreements.

“Bahrain previously was on a blacklist. We had international banks saying that they will remove their headquarters from Bahrain because of it. So we made promises to abide by certain requirements.

“If we are put on the blacklist again no amount of promises will take us off it.”

Both agreements were referred to the Shura Council for approval.

ghazi@gdn.com.bh

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