Withholding Tax

What is Withholding tax?

Withholding tax is the tax on income earned by a person who is not a resident of the State of Qatar, and it is paid by deduction of the source at a rate of 5%. The resident companies and permanent establishment of non-resident companies in the state and government agencies deduct the tax from the source and import it into the authority’s account when paying the amounts of services to non-residents in the state.

Who is subject to withholding tax?

Any natural or legal person who is not residing in the State is subject to income tax through deduction at source.

Who is responsible for paying the withholding tax?

The persons responsible for deduction from the source and the transfer of the amounts to the authority’s account would be:

  • Natural persons who carry out the activity in the State
  • Legal persons residing in the State
  • Ministries and other government agencies
  • Public bodies and institutions
  • Permanent establishments in the State belonging to non-residents.

How is the withholding tax collected by the Government?

Amounts paid to non-resident beneficiaries in the State of Qatar are deducted at a rate of 5% for services or activities performed wholly or partly in the state. The tax is then deducted and transferred to the General Tax Authority before the sixteenth day of the month following the month in which the deduction was made on the form prepared by the authority for this purpose.

The person who made the deduction issues a deduction certificate from the source to the beneficiary with whom it is deducted.

Can withholding tax be paid online?

The amounts deducted from the source are paid into the Authority’s account via the General Tax Authority’s electronic means through the current TAS system. The taxpayer can also transfer these amounts on the form and pay them to the Authority through the manual form.

It is worth noting that the General Tax Authority has launched Dhareeba, a new electronic system.

What is the percentage of the tax that is deducted at the source?

The final deduction from the source will be at a rate of 5% of the total amount thereof, from royalties, interest, and commissions, and in exchange for services performed wholly or partly in the country.

WHT of 5% applies to, amongst others, interest, royalties, commissions, and other payments for services performed wholly or partly in the State.

The services are considered performed in the State as long as they are used, consumed, or made benefit of in the State, even if they are performed wholly or partly outside the State