Bahrain and Sri Lanka have signed an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

The Double Taxation Agreement (DTA) will eliminate the double payment of taxes by nationals and enterprises of each of the two countries in the territory of the other.

It applies to persons who are residents of one or both of the two countries and covers taxes on income imposed on behalf of each of them, irrespective of the manner in which they are levied.

The agreement was signed in Colombo by Finance Minister Shaikh Ahmed bin Mohammed Al Khalifa and Sri Lanka's Senior Minister of International Monetary Co-operation Dr Sarath Amunugama.

The signing ceremony was attended by Finance Ministry and Sri Lankan officials.

The DTA represents Bahrain's 15th agreement which complies with the Standard on Exchange of Tax Information set by the Organisation for Economic Co-operation and Development and endorsed by the G20. Bahrain has signed a total of 31 DTAs.

Shaikh Ahmed welcomed the signing and hoped it would bolster economic co-operation and joint investment between Bahrain and Sri Lanka.

He also praised the role of the DTA as complimenting the memorandum of understanding on economic, trade and technical co-operation, which was signed by the two countries on July 29, 2009.

The Finance Minister conveyed two messages from His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa to Sri Lankan President Mahinda Rajapaksa and Prime Minister D M Jayaratne.

The letters focused on enhancing co-operation between Bahrain and Sri Lanka.

Shaikh Ahmed also met Sri Lankan financial and trade officials and discussed means of strengthening co-operation between the two countries in areas related to finance, economy and joint investment on the basis of mutual benefit.-TradeArabia News Service