A controversial mutual taxation agreement between Bahrain and Denmark has been given the green light by the Shura Council.

Councillors blocked the deal two months ago in retaliation at the country's so-called failure to take action against cartoons depicting Prophet Mohammed as a terrorist, published in 2006.

The government has already been given green light to sign agreements with six other Nordic countries after it got the backing of the council and parliament.

Shura foreign affairs, defence and national security committee chairman Dr Shaikh Khalid bin Khalifa Al Khalifa said Bahrain had to sign agreements with all seven states to get full access to the Scandinavian countries.

"We have looked into parliament's decision to block the agreement and found it to be against Bahrain's interests considering that the mutual taxation would open new gates with a group of countries, not one," he said.

"The mutual taxation agreement is beneficiary because it means that Bahrain will get access to Nordic countries' information in cases of tax evasion, investigation and lawsuits."

The bill will be referred back to parliament and be suspended if blocked again.

However, this would also make the agreements signed with the six other Nordic countries null and void. – TradeArabia News Service