Resolução da Assembleia da República n.º 196/2016 — Aprova a Convenção entre a República Portuguesa e o Reino do Barém para Evitar a Dupla Tributação e Prevenir a Evasão…

2 - The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of article 6, if the recipient of such income, being a resident of a Contracting State, carries on business in the other Contracting State through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of article 7 or article 14, as the case may be, shall apply.

3 - Where, by reason of a special relationship between the person referred to in paragraph 1 and some other person, or between both of them and some third person, the amount of the income referred to in paragraph 1 exceeds the amount (if any) which would have been agreed upon between them in the absence of such a relationship, the provisions of this article shall apply only to the last mentioned amount. In such a case, the excess part of the income shall remain taxable according to the laws of each Contracting State, due regard being had to the other applicable provisions of this Convention.

CHAPTER IV

Methods for elimination of double taxation

Article 23

Elimination of double taxation

1 - In Bahrain double taxation shall be eliminated as follows:

Where a resident of Bahrain derives income which, in accordance with the provisions of this Convention, may be taxed in Portugal, Bahrain shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Portugal. Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in Portugal.

2 - In Portugal double taxation shall be eliminated as follows:

Where a resident of Portugal derives income which, in accordance with the provisions of this Convention, may be taxed in Bahrain, Portugal shall allow as a deduction from the tax on the income of that resident an amount equal to the income tax paid in Bahrain. Such deduction shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in Bahrain.

3 - Where in accordance with any provisions of this Convention income derived by a resident of a Contracting State is exempt from tax in that State, such State may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income.

CHAPTER V

Special provisions

Article 24

Non-discrimination

1 - Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith, which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances, in particular with respect to residence, are or may be subjected. This provision shall, notwithstanding the provisions of article 1, also apply to persons who are not residents of one or both of the Contracting States.

2 - The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for taxation purposes on account of civil status or family responsibilities which it grants to its own residents.

3 - Except where the provisions of paragraph 1 of article 9, paragraph 6 of article 11, or paragraph 6 of article 12, apply, income from debt-claims, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State.

4 - Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the first-mentioned State are or may be subjected.

5 - The provisions of this article shall, notwithstanding the provisions of article 2, apply to taxes of every kind and description.

Article 25

Mutual agreement procedure

1 - Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or, if his case comes under paragraph 1 of article 24, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in taxation not in accordance with the provisions of the Convention.

2 - The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States.

3 - The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention.

4 - The competent authorities of the Contracting States may communicate with each other directly, including through a joint commission consisting of themselves or their representatives, for the purpose of reaching an agreement in the sense of the preceding paragraphs.

Article 26

Exchange of information

1 - The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political or administrative subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by articles 1 and 2.

2 - Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

3 - In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

4 - If information is requested by a Contracting State in accordance with this article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5 - In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.

Article 27

Limitation on benefits

1 - It is understood that the provisions of the Convention shall not be interpreted so as to prevent the application by a Contracting State of the anti-avoidance provisions provided for in its domestic law.

2 - It is understood that the benefits foreseen in the Convention shall not be granted to a resident of a Contracting State which is not the beneficial owner of the income derived from the other Contracting State.

3 - The provisions of the Convention shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the property or right in respect of which the income is paid to take advantage of those provisions by means of such creation or assignment.

Article 28

Members of diplomatic missions and consular posts

Nothing in this Convention shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or under the provisions of special agreements.

CHAPTER VI

Final provisions

Article 29

Entry into force

1 - This Convention shall enter into force on the thirtieth day following the receipt of the latter notification, in writing and through diplomatic channels, stating that all the domestic procedures of both Contracting States necessary to that effect have been completed.

2 - The provisions of this Convention shall have effect:

(i) In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January of the calendar year next following that in which this Convention enters into force;

(ii) In respect of other taxes, as to income arising in any fiscal year beginning on or after the first day of January of the calendar year next following that in which this Convention enters into force;

(i) In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January of the calendar year next following that in which this Convention enters into force;

(ii) In respect of other taxes, as to income arising in any fiscal year beginning on or after the first day of January of the calendar year next following that in which this Convention enters into force.

Article 30

Duration and termination

1 - This Convention shall remain in force for an indeterminate period of time.

2 - After the expiration of a period of five years from the date of its entry into force, either Contracting State may terminate this Convention. The termination shall be notified in writing and through diplomatic channels, before the thirtieth day of June of a calendar year.

3 - In the event of termination, this Convention shall cease to have effect:

(i) In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January of the calendar year next following that specified in the notice of termination;

(ii) In respect of other taxes, as to income arising in the fiscal year beginning on or after the first day of January of the calendar year next following that specified in the notice of termination;

(i) In respect of taxes withheld at source, the fact giving rise to them appearing on or after the first day of January of the calendar year next following that specified in the notice of termination;

(ii) In respect of other taxes, as to income arising in the fiscal year beginning on or after the first day of January of the calendar year next following that specified in the notice of termination.

In witness whereof the undersigned, duly authorized thereto, have signed this Convention.

Done in duplicate at Manama this 26th day of May, 2015, in the Portuguese, Arabic and English languages, all texts being equally authentic. In case of any divergence of interpretation of the text of this Convention, the English text shall prevail.

For the Portuguese Republic:

([ver documento original](https://files.diariodarepublica.pt/1s/2016/09/18300/0328003302.pdf))

For the Kingdom of Bahrain:

([ver documento original](https://files.diariodarepublica.pt/1s/2016/09/18300/0328003302.pdf))