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Article 5 establishes the criteria for determining the jurisdictional location of entities and permanent establishments for tax purposes. An entity is typically located where it is a tax resident based on management or creation. For flow-through entities, the location is generally the jurisdiction of establishment, provided specific conditions under Paragraph B are met; otherwise, they are treated as stateless. Article 5 also clarifies that entities incorporated in Bahrain or managed effectively from within the Kingdom are deemed tax residents. These rules ensure consistency with OECD Pillar Two standards regarding the allocation of taxing rights and the prevention of stateless constituent entities.
Chapter 2 - Scope and Imposition of the Tax
Article 5 - Entity Location
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