Qatar
Tax Guide: Qatar
Population: 2.97 million
Currency: Qatari Ryal
Principal Business Entities: The most popular choice for both foreign and domestic investors in Qatar is the Limited Liability Company (LLC) foreign ownership is limited to 49% except in some specific sectors, however profit-sharing ratios can be mutually agreed between Qatari and foreign partners. Other legal forms available in Qatar include sole proprietorships, partnerships, joint ventures, and 100% branches of foreign companies.
Last modified: 11/07/2023 17:36
Corporate taxation
| Rate | |
|---|---|
| Corporate income tax rate(1) | 10% |
| Branch tax rate(1) | 10% |
| Capital gains tax rate(2) | 10% |
- Gross income derived by a resident Taxpayer from an activity carried out in the State.
- Capital gains derived from the disposal of real estate properties located in the State or the disposal of shares, ownership shares and any such other tangible or intangible assets with respect to an activity carried out in the State
Residence: If a company is incorporated in accordance with Qatari legislation and is situated in the state of Qatar, having an effective management center in the state is considered as residence. Whereas, for unincorporated entity if it is resident in the State for a period of more than 183 consecutive or separate days during twelve (12) months is considered as permanent establishment and is subject to income tax.
Basis: Corporate taxes are charged on the income earned by non- Qatari shareholder only, Qatari citizens are exempted from corporate tax.
Taxable income:
1. Gross income derived by a resident Taxpayer from an activity carried out in the State.
2. Capital gains derived from the disposal of real estate properties located in the State or the disposal of shares, ownership shares and any such other tangible or intangible assets with respect to an activity carried out in the State.
3. Income derived by a Permanent Establishment (PE) from an activity carried out in the State. ‘Permanent establishment’ means the following:
a. A building site, construction, assembly project or supervisory activities in connection therewith constitute a PE only if such site, project or activity lasts more than six months.
b. Provision of services including the consultancy services provided through employees or other personnel engaged by the enterprise for such purpose, but only if the activities of that nature continue for a period or periods aggregating more than 183 days in a twelve months’ period.
4. Income derived by a non-resident person from any activity carried out in the State, where such activities are similar or quite similar to an activity carried out by a Permanent Establishment in the State and linked to the said non-resident person, irrespective of whether such activity was restricted to only one transaction.
5. Income derived by a non-resident person with no Permanent Establishment in the State, where such person carries on an activity in the State through a resident person acting on his behalf, in the following cases:
a. If the resident person concludes contracts or plays the principal role in concluding these contracts on behalf of the non- resident person, in a routine manner and without any major amendment therein, irrespective of these contracts being related to the transfer of asset ownership, grant of asset use rights, or provision of services by the non-resident person.
b. If the resident person maintains in the State, in a routine manner, inventories of merchandise and goods and is taking charge of it on behalf of the non-resident person.
Significant local taxes on income: 10%
Alternative minimum tax: N/A
Taxation of dividends: Currently there is no tax charged on the dividend earned by investing in Qatari listed and private entities.
Capital gains: • Capital gain tax at rate of 10% is charged on gain from disposal of properties and shares on private entities • Qatari citizen is exempted from capital gain tax • Capital gain earned from disposal of equity investment on Qatari listed entities are exempted
Losses: Loss can be carried forward for the period of 5 year subsequent to the taxable years.
Foreign tax relief: If state of Qatar has signed double taxation agreement/ treaty (DTA) with foreign countries Qatari entity can submit application for tax credit and same applies for foreign entities in their respective country.
Participation exemption: N/A
Holding-company regime: n/a
Tax-based incentives: NA
Group relief/fiscal unity: NA
Small company/alternative tax regimes: 100% Qatari owned entities having revenue below QAR 5 million and paid-up capital of QAR 1 million are allowed to submit simplified tax return without audited financial statement.
Corporate taxation: compliance
Tax year: In general, most of the entities taxable year end is 31 December. However foreign entities are allowed to choose different taxable year subject to the approval of General Tax Authorities.
Consolidated returns: General tax authority needs standalone financial statement along with the tax return.
Filing and payment: Income tax return should be submitted within 4 months subsequent to the end of taxable year. The tax due payment can be made via digital portal “Dhareeba” Direct payment Bank Transfer Debit/Credit transfer
Penalties: • QAR 500/each day for late submission • 2% per month on the late payment of tax due
Rulings: As per the rulings of General Tax Authority of The State of Qatar
Taxation of individuals
No Taxation on individual income
Residence: No Tax
Basis: NA
Taxable income: NA
Capital gains: • Capital gain tax at rate of 10% is charged on gain from disposal of properties and shares on private entities • Qatari citizen is exempted from capital gain tax • Capital gain earned from disposal of equity investment on Qatari listed entities are exempted
Deductions and allowances: NA
Foreign tax relief: NA
Taxation of individuals: compliance
Tax year: NA
Filing and payment: NA
Penalties: NA
Rulings: NA
Withholding taxes
| Kindly withhold the tax on amounts paid to non-residents who do not hold a tax card issued by the Public Revenues and Taxes Department in the Ministry of Economy and Finance, in accordance with Article 11/2 of the above-mentioned law. This remains subject, however, to Circulars issued by the Ministry in this respect and, particularly, Circular No. 2 of 2011 dated 12/06/2011 concerning retention of last payment and withholding tax. 5% of the Total invoice amount to be paid as WHT |
|---|
Branch remittance tax: NA
Anti-avoidance legislation
Transfer pricing: Transfer pricing disclosure to be made for the company has more than QAR 10 Million revenue or Assets during the financial year where the company has related party transaction domestic or international. Master file and local file disclosure – Total asset and Revenue equal or exceed QAR 50 Million. Country by County reporting (CBC) – Consolidted group multinational revenue is more than 3 Billion
Interest restriction: n/a
Controlled foreign companies: n/a
Hybrid mismatches: NA
Disclosure requirements: General tax authority requires audited financial statement to be prepared as per IFRS hence related party transaction need to be disclosed as per ISA 24. Furthermore, General tax authority has prescribed criteria for Transfer pricing disclosure as well as Masterfile and local file submission.
Exit taxes: NA
General anti-avoidance rule: As per the regulations of Qatar General Tax Authority
Digital services tax and Other significant anti-avoidance legislation: n/a
Value-added tax/Goods and services tax
Type of tax: As of date no Value addition tax (VAT) has been introduced by the state of Qatar
Standard rate: NA
Reduced rates: NA
Registration: NA
Filing and payment: NA
Social security contributions
Employees end of serivice contibutino is made by the Employer for the serivces period of more than year.
Minium of three week’s basic salary is contirbuted as social contribution per year.
Self-employed
NA
Other taxes
Capital duty: N/A
Immovable property taxes: N/A
Transfer tax: N/A
Stamp duty: n/a
Net wealth/worth tax: NA
Inheritance/gift taxes: N/A
Other: N/A
Tax treaties
Qatar has concluded more than 80 DTAs with most of its economic partners. While there are certain common features in these DTAs, each agreement remains a different and separate treaty with its own provisions. It is, therefore, necessary to check the respective agreement to ascertain the tax position and the benefits potentially available under the treaty.