Corporate - Corporate residence

Last reviewed - 03 April 2024

It is important to recognise that residence is not the basis used to determine whether an entity is taxable for CIT purposes in Qatar. Accordingly, a CIT exposure in Qatar may arise even if a company is not resident in Qatar. However, residence is relevant when considering whether WHT will apply on payments received rather than CIT.

A company is resident in Qatar if it is incorporated in accordance with Qatari laws, its head office is situated in Qatar, or its place of effective management and control is in Qatar.

Permanent establishment (PE)

On 2nd of February 2023, Qatar published Law No.11 of 2022 amending several provisions of the Tax Law. Following this, amendments to the ERs were also published recently on 16 May 2023. The amendments are effective from the date of publication.

The following are the key changes related to PE which were introduced in the amendments.

Fixed place

The amendments expand the scope of a fixed place PE to include “sales outlet” and “warehouse providing storage facilities” which would create a PE in Qatar.

Preparatory and auxiliary activities

The amendments introduce new exclusions for preparatory and auxiliary activities that should not constitute a PE. It is important to note that in certain circumstances, entities engaged in preparatory and auxiliary activities (even in the absence of a PE) will be required to comply with registration and notification requirements. The is a significant change as such entities will be required to register for tax purposes with the General Tax Authority ("GTA") and obtain a Taxpayer Identification Number through Dhareeba.

Dependent Agent PE

The regulations introduced “exclusivity” and “semi-exclusivity” tests in determining the existence of a ‘Dependent Agent’ PE. Since there is no definition or clarity available regarding the concept of ‘semi-exclusivity’, there would be significant uncertainty in determining the ‘Dependent Agent PE’ in certain circumstances.