Qatar legal & accounting & tax considerations in 2023
Since 2003, Healy Consultants Group assists our Clients to timely comply with their annual legal, accounting and tax obligations in Qatar.
- Resident companies in Qatar are subject to a standard 10% corporate tax.
- Companies operating in the petroleum and petrochemical industries suffer 35% tax.
- Capital gains by resident companies are taxed at corresponding income tax rates. However, capital gains for foreign companies selling their shares in resident companies are taxed at 10%.
- No withholding tax is levied on dividends in Qatar.
- Royalty payments, technical fees and interests are subject to 5% withholding tax.
- Resident companies can only carry forward business losses for up to three years. Carry back of business losses is not permitted.
- All Qatari employers must contribute 10% of their local employees’ basic salary to General Retirement & Social Insurance Authority (GRSIA).
- There is no capital duty, payroll tax, property tax, transfer tax or stamp duty in Qatar.
- Qatar companies wholly-owned by Qataris and resident Gulf Co-operation Council (GCC) nationals are 100% exempt from corporate income tax.
- Companies registered in Qatar Science and Technology Park (QSTP) are 100% exempt from corporate income tax and customs duties.
- 100% corporate tax exemption is applicable to companies registered in the Qatar Science and Technology Park (QSTP). These companies are permitted to trade directly in Qatar without a local agent.
Value Added Tax (VAT)
- Qatar currently imposes no VAT or sales tax on operations in Qatar. However, a 5% VAT is expected to be introduced in Qatar soon.
Filing due dates
- Resident companies must file tax returns within four months of the end of the accounting year. The tax year is generally the calendar year, however, companies are free to choose their accounting period, which must be more than six months but less than 18 months.
- The tax filing due date may be extended by the General Tax Authority (GTA) by a maximum of four months.
- In Qatar Financial Centre (QFC), the deadline to submit the annual income tax return and pay the tax due is the end of the sixth month following the company’s financial year-end.
- Qatar companies wholly-owned by Qataris and resident GCC nationals must file tax returns and audited financial statements only if i) their capital is at least QR2 million or ii) annual turnover is at least QR10million.
Consequences of late / non-filing of tax returns
- Failure to file a tax return by the due date will result in a penalty of QR500 per day, up to a maximum of QR180,000.
- Additionally, failure to pay tax due will result in a penalty of 2% of the amount of tax due per month of delay or part thereof, up to the amount of tax due.
- A penalty of 100% of the tax due is applicable for failure to withhold tax where required.
- Delays in remitting tax withheld will attract a penalty of 2% of the tax per month of delay, up to a maximum of 100% of the amount of tax due.
Qatar tax relief
- Onshore (i.e non-free zone) companies cannot access foreign tax credit.
- However, special purpose companies, including i) special investment funds or registered funds ii) alternative risk vehicles iii) special funding companies and iv) charities may apply to General Tax Authority (GTA) for exempt status
- Certain projects considered strategically beneficial to the Qatar economy may also apply for a GTA tax exemption. Exemptions may be granted for five or 10 years based on criteria set out in the Qatar Tax Law.
- Qatar has signed double tax agreements (DTAs) with 58 countries including i) Australia ii) China iii) Singapore iv) United Kingdom and v) United States.
Qatar Free Zones
- Companies established in a Qatar free zone are exempt from corporate income tax for 20 years from date of company set up. Shareholders of free zone companies are also exempt from personal income tax if they are tax resident in Qatar.
- All Qatar free zone companies pay zero customs duties on the import and export of goods.
- All Qatar free zone companies can access the double tax treaties Qatar has signed with countries around the world. This minimises their withholding tax exposure.
- All Qatar free zone companies can benefit from extensive exemptions on dividends and capital gains.
- Currently, a Qatar free zone company is not subject to value added tax (VAT).
- For more information on Qatar free zones, click here.
Tax reporting, accounting and auditing considerations
- All Qatari companies carrying out activities in Qatar must obtain a tax card from General Tax Authority (GTA) within 60 days from either i) date of registration with Ministry of Commerce and Industry or ii) start of business activity.
- The GTA may impose a penalty of QR20,000 for failure to register with the authority or maintain a valid tax card.
- Companies’ tax declarations should be accompanied by audited financial statements prepared by a Qatari auditor if i) the capital exceeds QR200,000 ii) total income exceeds QR500,000 or iii) the head office is situated outside Qatar.
- The tax declaration must be denominated in Qatari Riyals (QR) and must be certified by an accountant in practice in Qatar who is registered with the Ministry of Finance. If this requirement is not satisfied, the GTA will reject the tax declaration.
- Each company must file a separate tax return. Consolidated returns are not permitted under the tax regime.
Healy Consultants Group fees for accounting and tax support
Qatar accounting & tax task US$ Tax registration 950 Annual tax and accounting fees (active trading company) 2,300 Annual tax and accounting fees (dormant company) 950
- These accounting and tax fees are an estimate of Healy Consultants Group fees to efficiently discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, we will more accurately advise accounting and tax fees.
Monthly bookkeeping service
- Healy Consultants Group will be happy to provide a monthly book-keeping service for your Qatar company. Typically, our Accounting & Tax Department (ATD) team will receive a Dropbox of data from our Client and will immediately thereafter timely supply our Client with i) a general ledger ii) trial balance iii) monthly and quarterly management accounts and iv) monthly and quarterly government reporting, including sales tax and payroll.
- Healy Consultants Group charges a monthly bookkeeping fee of US$860 that includes i) receiving monthly invoices from our client ii) labelling monthly bank statement transactions iii) preparation of monthly income and expenses statements iv) highlighting anomalies and v) monitoring monthly profit levels to minimise annual tax.
- For further details of our book-keeping service and our fees, visit this page.
Maintaining accounting, secretarial and corporate structure data
- All accounting books, registers, and documents relating to a company’s activities in Qatar must be retained in Qatar for at least 10 years.
It is important our Clients are aware of their personal and corporate tax obligations in their country of residence and domicile, and that they fulfil those obligations annually in a timely and efficient manner. Let us know if you need Healy Consultants Group’s help to clarify your annual reporting obligations.