Taxes in Qatar
General Tax Authority
Income Tax
Income tax constitutes an annual levy on the aggregate income of taxpayers stemming from sources within Qatar in the preceding tax year. Taxpayers are to submit their tax returns within four months following the culmination of the tax year via the electronic system (Dhareeba).
Taxable Streams of Income.
An annual tax is applied to the sum Gross of income subject to taxation, encompassing the ensuing earnings achieved within the State:
Tax Exemptions
The Income Tax Law extends several tax exemptions, whereby incomes detailed in the provisions of Article 4 of the law are absolved under stipulated terms and regulations. These tax exemptions serve to foster investments, enrich the business environment, and stimulate the establishment and advancement of projects.
Calculation of Taxable Income
This pertains to gross income post allowable deductions in line with the provisions of the Income Tax Law and its accompanying executive regulations, inclusive of forward losses.
Income Tax Rates
Income tax rates are outlined as follows:
Remittance of Amounts to the General Tax Authority
The Income Tax Law incorporates clauses pertinent to instances wherein taxpayers engage in agreements or transactions primarily designed for tax avoidance, delineating the framework for interactions among interconnected enterprises. The executive regulations of the Income Tax Law encompass a spectrum of measures aimed at counteracting the erosion of the tax base and the shifting of profits amid associated/affiliated entities.
Income Tax Refund
Taxpayers possess the entitlement to solicit the refund of income tax sums and related financial penalties wrongfully accrued from them. The submission of a request, complete with supporting documentation substantiating their eligibility for reimbursement, is necessary and must be directed to the Authority.
Taxable Streams of Income.
An annual tax is applied to the sum Gross of income subject to taxation, encompassing the ensuing earnings achieved within the State:- Gross income emerging from business activities carried out in Qatar.
- Gross income originating from wholly or partially executed contracts in Qatar.
- Gross income deriving from properties located within the country, coupled with capital gains arising from their disposition.
- Gross income arising from ownership of shares or stakes in resident companies or those listed on national financial markets, along with capital gains stemming from their sale.
- Compensation for services rendered to headquarters, main offices, branches, or affiliated entities.
- Interest on loans procured in Qatar.
- Gross income resulting from the exploration, extraction, or utilization of natural resources within Qatar's borders.
- Gross income subject to taxation based on bilateral tax treaties.
Tax Exemptions
The Income Tax Law extends several tax exemptions, whereby incomes detailed in the provisions of Article 4 of the law are absolved under stipulated terms and regulations. These tax exemptions serve to foster investments, enrich the business environment, and stimulate the establishment and advancement of projects.Calculation of Taxable Income
This pertains to gross income post allowable deductions in line with the provisions of the Income Tax Law and its accompanying executive regulations, inclusive of forward losses.Income Tax Rates
Income tax rates are outlined as follows:- 10% on taxable income, applicable across all activities.
- A minimum of 35%, applicable to activities linked to petrochemical industries and petroleum operations.
Remittance of Amounts to the General Tax Authority
The Income Tax Law incorporates clauses pertinent to instances wherein taxpayers engage in agreements or transactions primarily designed for tax avoidance, delineating the framework for interactions among interconnected enterprises. The executive regulations of the Income Tax Law encompass a spectrum of measures aimed at counteracting the erosion of the tax base and the shifting of profits amid associated/affiliated entities.Income Tax Refund
Taxpayers possess the entitlement to solicit the refund of income tax sums and related financial penalties wrongfully accrued from them. The submission of a request, complete with supporting documentation substantiating their eligibility for reimbursement, is necessary and must be directed to the Authority.Withholding Tax
The royalties, interest, commissions, and fees for services rendered in whole or in part in the State of Qatar, paid to non-residents for activities unrelated to a permanent establishment in the State of Qatar, are subject to a final deduction at source of 5% of the total amount. This is in accordance with the provisions of adopted tax treaties and as per Article (9, paragraph 2) of Income Tax Law No. 24 of 2018.
The service is deemed to be performed wholly or partially in the country if any necessary work is carried out within Qatari soil to accomplish it. This includes, in particular, data collection, site inspections, and service completion, even in cases where these tasks are done by a person other than the taxpayer. The service’s delivery will not be a determining factor whether it counts as performed or not.
- Natural persons engaged in activities in the state of Qatar.
- Legal persons residing in the State of Qatar.
- Ministries and other government entities.
- Public institutions and establishments.
- Permanent establishments in the State of Qatar owned by non-residents.
To the exclusion of amounts payable to ministries, other government entities, public institutions, and establishments, the above-mentioned amounts will be deemed as paid after 12 months from the date on which they become due for payment.
Tax is not withheld at source on amounts paid to persons who possess a tax card or persons registered with the Qatar Financial Centre. This applies particularly to amounts paid to a permanent establishment owned by a non-resident person.
<h4class="x_MsoNormal">Remittance of Amounts to the General Tax Authority
Tax is withheld and remitted to the authority before the 16th day of the month following the month in which the withholding occurred. The person who withheld the tax issues a certificate to the recipient using a form prepared by the Authority for this purpose.
Income Tax Refund
Persons subject to withholding tax procedures have the right to apply for a refund if there is an effective income and capital tax treaty in place that supports their request.
Non-resident persons or their authorized representative who are subject to withholding tax procedures must submit their applications to the Authority, requesting the enforcement of the provisions of this treaty using the relevant form provided by the Authority. If the application is accepted, the Authority will refund the tax according to the refund procedures outlined in the Income Tax Law and its executive regulations.
Excise Tax
The legal framework:
- This tax comes in implementation of the agreement of the Gulf Cooperation Council, which was instated in November of 2016, in regards to the Excise tax that is imposed on a number of harmful goods with the aim of limiting their consumption.
- The Excise tax was implemented in the State in accordance with Law No. 25 of the year 2018 and took effect in January of 2019.
- Excise Tax represents an investment in Qatar’s future by building a healthier society. It is a consumption tax that applies to goods typically deemed harmful to human health and the environment.
- The revenues generated from the Excise Tax will be channeled toward enhancing public services, such as hospitals, infrastructure, and education. By contributing to achieving the Qatar National Vision 2030's social policy goals, the Excise Tax will serve to ensure a sustainable future for The State of Qatar and its forthcoming generations.
Definition of Excise Tax:
It is an indirect tax imposed on certain goods that are considered harmful to human health or the environment. These goods are referred to as “excise goods”.Goods subject to the Excise Tax and its applicable rates:
- Tobacco products at 100% on the higher price between the standard price and pre-tax retail selling price.
- Energy drinks at 100% on the higher price between the standard price and pre-tax retail selling price.
- Soft drinks at 50% on the higher price between the standard price and pre-tax retail selling price.
Individuals required registering for the Excise Tax:
The responsibility in registering for the Excise Tax falls on any individual (natural or legal) who performs any of the following acts: - Importing excise goods to the State of Qatar.
- Producing excise goods in the State of Qatar.
- Operating a tax warehouse in the State.
Digital Tax Stamp System
The digital tax stamp is a unique and distinctive mark, and it comes in the form of a physical sticker or a digital code containing encrypted digital data, which is placed on excise goods and is activated electronically. Producers and importers of excise goods concerned with digital tax stamps must respect the provisions and procedural rules issued for this purpose to be able to legally import, produce and sell those excise goods in Qatar.
Goods included in the Digital Tax Stamp System:
Goods included in the Digital Tax Stamp System are goods subject to Excise Tax that are imported or produced in the State, the first stage includes the following:- Cigarettes.
- Other tobacco products.
The Main Objectives of the Digital Tax Stamp System:
- Strengthening the oversight role of the General Tax Authority by providing an informative system dedicated to excise goods to ensure the collection of all taxes and fees due.
- Enhancing the ability to ensure the legal entry of excise goods into the State of Qatar to combat the illegal trade of excise goods.
- Providing a detailed database to enhance the ability of the relevant authorities to analyze and review excise goods and improving the ability to monitor the market in order to detect cases of smuggling and tax evasion of excise goods.
- Compliance with the provisions of the Unified Gulf Agreement regarding the Excise Tax.
The General Tax Authority has taken its first steps in applying the Digital Tax Stamps, starting with cigarettes and other tobacco products imported to the State of Qatar. The Authority's provided importers with the opportunity to submit requests to obtain Digital Tax Stamps related to cigarettes and other tobacco products imported from abroad.
A ban on the import of cigarettes without Digital Tax Stamps affixed to them, valid and active, has been implemented since October 13, 2022. The ban will also be applied to the sale and circulation of cigarettes that do not respect the provisions of Digital Tax Stamps within the country, starting January 11, 2023. It will also apply to other tobacco products.
Those that do not carry valid and activated Digital Tax Stamps affixed to them, and they will be prohibited from being imported starting November 03, 2022, and their sale and circulation within the country will be restricted starting from the date of February 01, 2023.
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