Page 13 - ICAI UAE TAX UPDATE_JULY 2024

and companies with annual net profits not exceeding
Bahraini Dinars (BHD) 30,000 are also exempt.
Funds Allocation: The new corporate income tax law, the
collected funds will be allocated as follows: 50% to the
General State Account for government operations, 20%
to the Social Insurance Fund, 20% to the Social Security
Fund, and 10% to the Unemployment Insurance Fund.
This allocation supports various public services and
social programs.

Tax Evasion: The new bill addresses tax evasion in a
detailed and comprehensive manner. It identifies several
acts as tax evasion, including failing to register within
60 days of the CIT Law’s publication, not submitting
tax returns or paying taxes within 60 days after the due
date, and making improper deductions or adjustments
to income tax.

The bill also covers issuing or receiving tax refunds
without legitimate reasons, submitting forged or
fabricated documents, and failing to issue tax invoices
for taxable supplies or imports. These provisions are
aimed at ensuring strict compliance and maintaining the
integrity of Bahrain’s tax system.

Penalties: The bill sets out stringent penalties for
tax evasion to ensure serious consequences for
offenders. Individuals caught evading taxes could face
imprisonment ranging from one month to three years
and fines up to three times the amount of the unpaid tax.

For repeat offenders within three years of a previous
conviction, penalties are doubled. Legal entities are
also held accountable and will face doubled fines if the
offenses are committed in their name or for their benefit.

Tax evasion cases will be fast-tracked through the courts
and are considered serious crimes. Criminal action for
tax evasion requires a request from the minister or his
delegate.

Reconciliation in tax evasion cases is possible if the
accused pays the minimum prescribed fine and the due
tax amount, resulting in the extinction of the criminal
case.

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UA E TAX UPD ATE NEWSLET TER ISSUE 04 - July 2024 ISSUE 04 - July 2024 UA E TAX UPD ATE NEWSLET TER