Taxation in Qatar

Qatar, one of the Arabian Peninsula countries, has been drastically molding itself into a business investment hub. One of the core planning that every business needs to go ahead with is tax planning. 

It serves to be an art performed by professional experts to reduce the tax amount to be paid to the government for a specific period. After the company registration process in Qatar, the next move should be tax planning. 

According to the Ministry of Economy and Commerce and the Qatar Tax Department, all companies in Qatar must draw up their final statements per the International Accounting Standards (IAS). Personal income is not taxed. 

However, the Companies Tax law mandates that anyone who engages in any kind of economic activity to earn money must pay tax. Nationals of Qatar and the GCC who reside in Qatar are not required to pay taxes on their entire income. 

Anyone who owns a permanent residence in the State of Qatar, stays there for more than 183 days each month, whether continuously or sporadically, or whose important interests are connected to Qatar is considered a resident.

Qatar Tax Rates

If you are planning a business setup in Qatar, you need to know the system of taxation in Qatar. The country holds itself as one of the GCC countries and has been one of the eye-catching destinations for business investors, mainly because of the flexible tax structure. 

Here are a few types of taxes imposed in Qatar.

1. Corporate Tax in Qatar

The corporate tax in Qatar is subjected to a payment of 10%. The nation holds a position among the lowest tax rate countries in the world.

2. The Withholding Tax, Qatar

It includes:

• Dividends

Qatar doesn’t levy withholding tax on dividends.

• Interest

Along with certain exceptions, the interest stands at 7%.

• Royalties

Subjected to 5%.

• Technical Service Fees

Subjected to 5%, payable to non-residents.

• Retention

A retention tax of 3% is applicable.

• Others

A rate of 7% applies to commissions, brokerage, and attendance fees.

3. Qatar Income Tax

Whether you opt for a mainland or a Qatar Free Zone company formation, it is to be noted that the nation does not levy any specific tax on the salaries and wages of individuals. It also gives the flexibility of exemption for equity shares, and profits gained on bank deposits, etc.

4. Selective Tax

The Qatari govt. has planned to levy a special tax on harmful goods or health-destroying goods. It includes a 100% tax on tobacco products and 50% on all sugary drinks.

5. Qatar VAT

VAT implementation in Qatar is still not effective. According to the GCC VAT Framework, all the GCC countries are expected to impose VAT at a rate of 5%.

Thus, you have a clear idea regarding the number of taxes available in Qatar. Next, let’s have a look at the main business sources of tax in Qatar.

Sources for Qatar Tax

The main categories of taxable sources in Qatar include:

• Activities carried out in Qatar
• Contracts wholly or partially performed in Qatar
• Real Estate in Qatar
• Loans and interest obtained
• Extraction of natural resources situated in Qatar.

Now, the overhead stated points are the core sources through which taxes are charged in Qatar. Being a business owner or an entrepreneur, one should be aware of the Double Tax Agreement. 

Do read below.

Double Taxation Relief in Qatar Tax System

The concept of double taxation is to eliminate the double tax that must be borne during the import-export process. The implementation of double tax treaties helps countries enter into multiple business agreements without fearing double taxes. 

To date, Qatar has signed more than 60+ tax treaties. This attracts foreign investors to a great extent. Moving ahead, let’s have a look at the tax laws.

Qatar Tax Law

Various new laws benefitting foreign investors are issued in Qatar. Among them, according to the new laws planned by the Qatari government regarding taxation, every business entity needs to follow the below stated:

• The Qatari government has implemented General Tax
• Certain exemptions are to be made for specific economic sectors
• No income tax is to be levied on Qatari residents and citizens
• Selective taxes would be implemented on harmful goods.

Thus, it can be easily understood that existing or new business entities must abide by the Qatari tax system to sustain the nation’s economy. Dealing with the taxation procedures turns out to be complex towards the end. 

So, for business entities, it turns out to be a feasible option to outsource the taxation services to professional experts who can deeply analyze the tax amount that needs to be paid. Tensed? 

Don’t worry! We have got it all covered.

Exemptions under the Tax System in Qatar

The following are exempt from taxes:

• Profits and revenues from Public Corporations, Development, and Treasury Bonds
• Dividends and other share-related income that satisfies the requirements of Law No. 24 of 2018 on Tax Income
• Small-scale handmade companies (three employees or less)
• Income of businesses engaged in fishing, farming, and marine and aerial transportation, subject to reciprocity.

Our Services of Taxation in Qatar

At Commitbiz, along with company formation, accounting & bookkeeping, and Qatar visa services, we also stress understanding the financial scenario of the business entity. Our tax-related services in the nation include:

• Developing tax strategies
• Lessen the tax liabilities
• Analyze the business income and tax to be paid
• Filing Status and deductions
• Selection of investments.

Commitbiz stands as one of the leading business and tax advisors in the Middle East. We are a team of experts dedicated to the company establishment process, along with accounting, taxation, legal, and visa services.

If you are planning to opt for a taxation service or have any queries, do contact us – we’d be happy to assist you.