Accounting and tax
Corporate tax rate
- The standard tax rate in Qatar is 10%. Oil and gas operations are taxed at a higher rate of 35%;
- Resident companies will not be required to pay VAT in Qatar;
- Capital gains by resident companies will be taxed at the 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. Withholding tax is levied on royalty payments and interest payments at 5% and 7% respectively;
- Qatar has signed DTAs with 58 countries including i) Australia, ii) China, iii) Singapore, iv) United Kingdom and v) United States;
- Resident companies can only carry forward their business losses for up to 3 years. Carry back of business losses will not be permitted.
Miscellaneous tax matters
- All Qatari employers must contribute 10% of the basic salary of their employees to social security;
- There is no capital duty, payroll tax, property tax, transfer tax or stamp duty levied in Qatar;
- Resident companies must file their tax returns within 4 months after the end of the accounting year. While all companies must file financial statements, they are free to choose their accounting period which must be more than 6 months and less than 18 months;
- A Qatar LLC is required to submit annual tax returns. If annual profits exceed QR100,000, the declaration should be accompanied by audited financial statements prepared by an auditor registered in Qatar;
- Healy Consultants Group PLC’s monthly bookkeeping fee of US$860 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;
- A Qatar LLC is required to submit annual tax returns. If i) annual profits exceed QR100,000 or ii) the head office is situated outside Qatar, the declaration should be accompanied by audited financial statements prepared by an auditor registered in Qatar;
- The tax filing due date may be extended subject to approval by the Qatar Tax Department. However, the length of the extension may not exceed four months;
- All accounting books, registers, and documents relating to a company’s activities in Qatar must be retained in Qatar for at least 10 years;
- The tax declaration must be denominated in Qatari Riyals (QAR) 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 Qatar Tax Department (QTD) will reject the tax declaration;
- Qatar companies wholly-owned by Qataris and resident GCC nationals are exempt from corporate income tax. However, the companies must file tax returns and audited financial statements with QTD if their capital is at least QAR2 million or if their annual revenue is at least QAR10 million;
- Certain projects that are considered strategically beneficial to the Qatar economy may apply for a tax exemption from QTD. The exemptions may be granted for a period of 5 or 10 years based on certain criteria set out in the Qatar Tax Law.
Legal and compliance
Healy Consultants’ Compliance Department assists our Clients efficiently and completely discharge their Qatar legal and tax obligations to support Qatar company registration.
- The Commercial Companies Law was established in 2002 and covers establishment, structure, and governance of private businesses in Qatar;
- Qatar company directors are appointed, replaced, and dismissed by the shareholders. Only the directors have the power to manage the day to day operations of the company. The identities of shareholders and directors are on the Qatar public register;
- Each Qatar business setup must appoint a manager. The manager is appointed by the memorandum of association (MOA) or by a separate management contract. Unless otherwise stated in the MOA, the company manager shall enjoy full powers of administration, and his acts shall be binding to the Company;
- A Qatar LLC is required to transfer 10% of net profits each year to a legal reserve until such reserve reaches a level of 50% of the paid-up share capital;
- Foreign entities may only conduct business registration in Qatar after it is licensed by the Department of Economic Development (DED). The DED is the statutory body that regulates and controls the licensing procedures for all Qatar entities. Every Qatar company registration entity must apply for one of the following licenses:
- A commercial license for buying and selling of goods including wholesale or retail trade enterprises, contractors, hotels, transport and storing establishments, etc; or
- An industrial license to discover natural resources or transform raw materials into manufactured products; or
- A professional license to practice any profession such as engineering consultancy, auditing and accounting, business set up, medical, and educational services
- The DED does not permit two different classified business activities under one license e.g. trading and manufacturing.
Litigation and arbitration
- Qatar is a civil code jurisdiction and courts do not follow a system of precedents or have formal reporting of court decisions. Hence, there is plenty of unpredictability in litigious matters;
- Laws in Qatar are issued in Arabic and official translations are rarely available. Court proceedings are also held in Arabic;
- Consequently, foreign businessmen in Qatar usually choose binding arbitration as the method of dispute resolution. There are three possible centres of arbitration in Qatar i) the Qatar International Centre for Arbitration (QICA) ii) the QFC Tribunal and iii) arbitration centres in Europe or North America;
- Qatar has acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention). Therefore, arbitration awards made in countries that are party to this convention should be enforceable in Qatar in accordance to the provisions of the convention.
Party to international agreements
- Qatar became a member of the World Trade Organization in 1994. It is a member of the Gulf Cooperation Council, Organization of Petroleum Exporting Countries, International Monetary Fund, Organization of Arab Petroleum Exporting Countries in addition to the Arab League and the United Nations;
- Qatar joined the World Intellectual Property Organization in 1976. They also signed agreements in 1986, protecting the author’s rights as well as the agreement of Berne in 2000, which protects the literary and artistic compilations;
- Qatar also signed the agreement of Paris for industrial property protection in 2000. Qatar has acceded to the Patent Cooperation Treaty; However, Qatar is currently not a signatory under the Madrid Convention.