Qatar’s tax laws have been amended substantially in the year 2009 and 2018.
Registration:
Any entity incorporated in the state of Qatar should apply for tax registration card within 30 days of incorporation (Commercial Registration by MOCI) or commencement of commercial activities, whichever is earlier. Failure to do so or maintain a valid tax card could result in a penalty of QR 20,000.
Taxation:
Book profit is expected to be reported using International Financial Reporting Standards and any deviations requires prior approval. Normally all income arising out of performing business activities within the territory of Qatar is taxable income. All expenses are deductible subject to certain specific guidance/restrictions over Depreciation, Donations, gift and aids paid, entertainment expenses. Tax Depreciation of certain assets are computed using “Block of Assets” method and certain long-term fixed assets using straight line method. Any surplus on sale of assets is taxable as capital gain.
Salary income of the citizen and residents of the State of Qatar is not taxable, including any remittance thereof. Further Dividend income is not taxable in the hands of recipients.
Losses can be carried forward for next 3 immediate years and set-off against any profits. Withholding tax is levied on all entities operating in the State of Qatar. Refer to our withholding tax page.
Tax rate and return:
Corporate tax rate of 10% applicable on the profit but the profit of entities fully owned by the citizens of Gulf Cooperation Council (GCC) and any share of profit attributable to GCC nationals who are resident in Qatar is exempted from tax.
All entities are expected to file the tax return within 4 months from the financial year end. However, it should be noted that even the entities 100% owned by GCC national should file the income tax returns if the share capital is greater than QR 2 million or if the annual revenue is QR 10 million. Any change in Financial year requires prior approval from Tax authorities.
Flat tax of 35% is applied on profits arising from agreements relating to Petroleum and Petrochemicals operations.
Qatar Financial Centre Tax authorities follows different code of law which is also provides mechanism for taxing mainly the commercial activities in the State of Qatar.
Qatar’s Excise Law:
Recently introduced, Qatar’s Excise Law largely focus on levying 100% tax on tobacco products and 50% tax on Energy drinks, Special goods and carbonated drinks. Qatar’s tax laws are simple and straight forward in nature. It supports the ease of doing business and avoids major cost to keep additional tax records.