What is income tax in Qatar?

• Income tax in Qatar is an annual levy on the aggregate income of taxpayers derived from sources within the country in the preceding tax year. Taxpayers must submit their tax returns within four months following the end of the tax year via the Dhareeba electronic system.

Taxation in Qatar is applicable to which type of income?

Taxable income in Qatar includes:

• Gross income from business activities conducted in Qatar.
• Gross income from contracts wholly or partially executed in Qatar.
• Gross income from properties located within Qatar, including capital gains from their sale.
• Gross income from ownership of shares or stakes in resident companies or those listed on national financial markets, along with capital gains from their sale.
• Compensation for services rendered to headquarters, main offices, branches, or affiliated entities.
• Interest on loans secured in Qatar.
• Gross income that is produced from the exploration, extraction, or utilization of natural resources within Qatar.
• Gross income subject to taxation under bilateral tax treaties.

Are there any tax exemptions in Qatar?

• Yes, the Income Tax Law in Qatar provides several tax exemptions as outlined in Article 4 of the law. These exemptions are designed to promote investments, enhance the business environment, and encourage the establishment and development of projects.

How is taxable income calculated in Qatar?

• Taxable income in Qatar is calculated as the gross income minus allowable deductions in accordance with the provisions of the Income Tax Law and its executive regulations. This calculation includes the carry forward of losses.

What are the income tax rates in Qatar?

• The standard income tax rate in Qatar is 10% on taxable income for all activities. However, a higher rate of at least 35% applies to activities related to petrochemical industries and petroleum operations.

How should taxpayers remit amounts to the General Tax Authority in Qatar?

• Taxpayers must remit amounts to the General Tax Authority in accordance with the Income Tax Law. The law includes provisions for cases where taxpayers engage in agreements or transactions primarily aimed at tax avoidance and outlines the framework for transactions among interconnected enterprises. Base erosion and profit sharing among associated entities is prevented by the executive regulations.

Can taxpayers request a refund of income tax in Qatar?

• Yes, taxpayers in Qatar have the right to request a refund of income tax amounts and related financial penalties that were wrongfully collected from them. To do so, they must submit a request along with supporting documentation proving their eligibility for the refund to the General Tax Authority.

What is Dhareeba and how is it used for tax filing in Qatar?

• Qatar uses an electronic system named Dhareeba for filing tax returns. Taxpayers must submit their tax returns through Dhareeba within four months after the end of the tax year.

Are there specific tax rates for different industries in Qatar?

• Yes, while the general tax rate is 10%, activities related to the petrochemical and petroleum industries are subject to a minimum tax rate of 35%.

What measures are in place to counteract tax avoidance in Qatar?

• The Income Tax Law and its executive regulations in Qatar include measures to counteract tax avoidance, such as provisions for agreements or transactions aimed at tax avoidance and measures to prevent base erosion and profit shifting among affiliated entities.

What is Capital Gains Tax in Qatar?

• Capital Gains Tax in Qatar is a tax imposed on the capital gains earned by both residents and non-residents from the disposal of real estate, shares, property rights, and any tangible or intangible assets associated with activities conducted within the State of Qatar.

What types of profits are subject to Capital Gains Tax in Qatar?

• Profits generated from the disposal of real estate located within Qatar, shares, property rights, and any tangible or intangible assets associated with an activity conducted within the State of Qatar are subject to Capital Gains Tax.

Are there any exemptions from Capital Gains Tax in Qatar?

• Yes, exemptions include capital gains derived from the disposal of real estate or securities by natural persons, provided these are not associated with a taxable business. Additionally, gains from revaluation of a company's assets offered as in-kind contributions to a resident joint-stock company are exempt, provided the shares are nominal and non-transferable for at least five years.

What is the tax rate for capital gains in Qatar?

• The general tax rate for capital gains in Qatar is 10%. However, if the gains are related to petroleum activities and petrochemical industries, the tax rate is 35%.

What are the tax obligations for individuals and businesses in Qatar regarding Capital Gains Tax?

• Taxpayers must submit a capital gains tax return and payment to the General Tax Authority (GTA) within 30 days of concluding a contract or disposing of assets. If the taxpayer has already submitted a tax return on their income and capital gains for the specified period, they are exempt from this requirement.

When must taxpayers file a capital gains tax return in Qatar?

• All taxpayers, registered or unregistered, must file a capital gains tax return within 30 days of disposing of real estate, shares, equity rights, or any tangible or intangible business assets not included in the balance sheet.

What are the accounting obligations for businesses in Qatar?

• Businesses in Qatar must maintain accurate and detailed accounting records, books, and documents in compliance with both Qatari laws and international accounting standards. These records must be kept for the duration specified in the regulations, with certain exemptions possible under conditions outlined by the General Tax Authority.

Who is responsible for submitting the capital gains tax return in Qatar?

• The responsibility to submit the capital gains tax return falls on the taxpayer, whether they are an individual or a business entity, and must be done within the stipulated 30-day period.

What happens if the capital gains are included in the balance sheet of a business in Qatar?

• If the capital gains are included in the balance sheet, they should be declared in the taxpayer's income tax return instead of a separate capital gains tax return.

Are there any specific regulations for accounting records related to taxation in Qatar?

• Yes, businesses must comply with Qatari laws and international accounting standards in maintaining their accounting records. The General Tax Authority can provide exemptions from maintaining such records under specific conditions as outlined in the regulations.

What is the withholding tax rate for non-residents in Qatar?

• The withholding tax rate for royalties, interest, commissions, and fees for services rendered in whole or in part in Qatar, paid to non-residents for activities unrelated to a permanent establishment in Qatar, is 5% of the total amount. This is stipulated under Article 9, paragraph 2 of Income Tax Law No. 24 of 2018, and adheres to the provisions of adopted tax treaties.

Who is obligated to withhold tax in Qatar?

The obligation to withhold tax in Qatar falls on:

• Natural persons engaged in activities within Qatar.
• Legal persons residing in Qatar.
• Ministries and other government entities.
• Public institutions and establishments.
• Permanent establishments in Qatar owned by non-residents.

Exceptions are made for amounts payable to ministries, government entities, public institutions, and establishments.

Are there any exemptions from withholding tax in Qatar?

• Yes, withholding tax is not applicable to amounts paid to persons who possess a tax card or are registered with the Qatar Financial Centre. This particularly applies to amounts paid to a permanent establishment owned by a non-resident person.

When should the withheld tax be remitted to the General Tax Authority in Qatar?

• The withheld tax must be remitted to the General Tax Authority before the 16th day of the month following the month in which the withholding occurred. The person who withheld the tax is responsible for issuing a certificate to the recipient using a form prepared by the Authority.

How can non-residents apply for an income tax refund in Qatar?

• Non-residents subject to withholding tax procedures can apply for an income tax refund if there is an effective income and capital tax treaty supporting their request. They or their authorized representatives must submit an application to the Authority using the relevant form provided. If the application is accepted, the Authority will refund the tax according to the procedures outlined in the Income Tax Law and its executive regulations.

What is the Excise Tax in Qatar?

• The Excise Tax in Qatar is an indirect tax imposed on certain goods considered harmful to human health or the environment. This tax was implemented following the agreement of the Gulf Cooperation Council in November 2016, with the aim of limiting the consumption of these harmful goods. The Excise Tax took effect in January 2019 under Law No. 25 of 2018. It serves to build a healthier society and supports the Qatar National Vision 2030 by funding public services like hospitals, infrastructure, and education, ensuring a sustainable future for Qatar.

Which goods are subject to the Excise Tax in Qatar?

• Goods like tobacco, energy drinks and soft drinks are subjected to Excise tax in Qatar. Tobacco products are taxed at 100% on the higher price between the standard price and the pre-tax retail selling price. Energy drinks are also taxed at 100% on the higher price between the standard price and the pre-tax retail selling price. Soft drinks are taxed at 50% on the higher price between the standard price and the pre-tax retail selling price.

Who is required to register for the Excise Tax in Qatar?

• Any individual, whether natural or legal, who imports excise goods into Qatar, produces excise goods in Qatar, or operates a tax warehouse in the state, is required to register for the Excise Tax. This ensures compliance with the tax regulations and proper management of the excise goods within the country.

How does the Excise Tax contribute to Qatar's future?

• The Excise Tax in Qatar contributes to a healthier society by discouraging the consumption of harmful goods. The revenue generated from this tax is invested in enhancing public services such as hospitals, infrastructure, and education. By doing so, the Excise Tax aligns with the Qatar National Vision 2030's social policy goals, ensuring a sustainable and prosperous future for Qatar and its future generations.

What is the legal framework behind the Excise Tax in Qatar?

• The legal framework for the Excise Tax in Qatar is based on the agreement of the Gulf Cooperation Council instated in November 2016. The tax was implemented in Qatar under Law No. 25 of 2018 and came into effect in January 2019. This framework ensures that the Excise Tax is properly regulated and enforced, supporting Qatar's goals of reducing the consumption of harmful goods and investing in the country's future.

What is the standard tax rate for individuals and corporate entities in Qatar?

• Under the provisions of Law No. 24 of 2018 and its amendments, the applicable tax rate for individuals and resident corporate entities in Qatar is 10% of the taxpayer's taxable income. This rate applies to Qatar-sourced income, with some specific exemptions detailed in the law.

Are there any exemptions to the income tax imposed in Qatar?

• Yes, the Income Tax Law exempts certain entities and incomes from taxation. Exemptions include ministries, government bodies, public authorities and corporations, international organizations operating in Qatar, salaries, wages, allowances, and income from legacies and inheritance. Additionally, profits of legal persons resident in Qatar are exempted in proportion to the dividends of Qatari natural persons and the ownership percentage of entities wholly or partially owned by Qataris.

What is the tax rate for entities operating in the oil and gas sector in Qatar?

• Entities operating in the oil and gas sector in Qatar, as well as those involved in petrochemical industries, are subject to a tax rate of no less than 35%. This rate also applies to entities where the government, ministries, or other public bodies are a party. Agreements related to these sectors stipulate specific tax conditions, provided the tax rate is not less than 35%.

How are non-residents taxed on income earned in Qatar?

• Non-residents are subject to a final deduction of 5% on royalties, benefits, commissions, and consideration for services rendered in whole or in part in Qatar, provided these activities are not related to a permanent establishment in the State. This deduction is made at the source as specified by the Regulation under the Income Tax Law.

Are there any specific tax agreements that override the provisions of the Income Tax Law in Qatar?

• Yes, tax agreements concluded prior to the entry of Law No. 24 of 2018, where the government, ministries, other government agencies, or public corporations are a party, will have their stipulated tax rates applied. If such agreements do not specify a tax rate, a tax rate of 35% will be imposed.