Dhareeba registration and implementation
The GTA, via Circular 5, has announced the formal closure of the previous Tax Administration System (TAS). With effect from 1 November 2020, all tax returns are required to be filed and other tax submissions (e.g. withholding tax [WHT], contract notifications) made using the new TAS (i.e. Dhareeba). The GTA has emphasised that taxpayers should make the required arrangements to ensure submission of their tax obligations through Dhareeba are fully compliant with the procedures described in the user guides available on the Dhareeba portal.
Previously, all taxpayers, including those registered in the previous TAS, should have re-registered in Dhareeba within the extended deadline of 31 December 2020.
The tax year is generally the same as the calendar year, although advance approval may be sought from the GTA to use an accounting year-end other than the calendar year.
The tax return is due within four months from the end of a company's accounting period.
Payment of tax
The tax payable is based on the tax declaration and should be paid on the same day that the tax return is due.
Late filing penalties
The Qatar tax law contains a penalty regime, which imposes a penalty for the late filing of a tax return. In addition, a penalty applies where there is a late payment of tax.
Objection and appeals process
It is possible for a taxpayer to initially object directly to the GTA regarding a decision related to a tax position. If the objection is unsuccessful with respect to altering the GTA’s decision, an appeal may be made by the taxpayer to the Tax Appeals Committee. Based on the Tax Appeals Committee's decision with respect to the appeal, a final appeal may be made by either the GTA or the taxpayer to the administrative chamber of the court. The law prescribes time limits for each stage of the appeal process.
There is a mandatory requirement to use Arabic language in all the correspondences with the GTA after 13 July 2019.
Accounting and audit requirements
A company's CIT return is required to be accompanied by audited financial statements if any of the following cases apply:
- The capital exceeds QAR 200,000.
- Total income exceeds QAR 500,000.
- The head office is situated outside of Qatar.
Qatar tax law requires accounts to be prepared in accordance with IFRS. For taxable years starting on or after 1 January 2020, there is a requirement to submit the financial statements in the Arabic language.
Accounting record retention
All accounting books, registers, and documents relating to activities in Qatar are required to be retained in Qatar for a ten-year period.
The Qatar tax law contains anti-avoidance provisions that give the GTA wide powers to counteract transactions that have been carried out with a tax avoidance purpose. These powers include substituting an arm’s-length value or re-characterising transactions.
Topics of focus for the GTA
The following areas appear to be the focus of the GTA from a tax compliance perspective:
- Representative offices of non-residents are being required to file tax returns, notwithstanding the fact that they may only be promoting their business.
- The GTA is closely examining the taxpayer’s activities to establish whether or not a PE exists. This is a particular area of focus where a taxpayer submits a claim for a refund of WHT on the basis of application of the provisions of a DTT. If a taxpayer has a PE, the Foreign Investment Law requires that PE to be formally registered as a company or a temporary branch.
- Related-party transactions and large and unusual items of expenditure are being scrutinised by the GTA. See the Group taxation section for comments on the anti-avoidance provision, thin capitalisation, and transfer pricing.
- The allocation of head office general and administrative expenses to a Qatar branch of a foreign company.
- Capital gains generated on the sale of shares by a non-resident in a Qatari company.
- Compliance with the requirements of contract notification and WHT.
- In terms of relief claimed under DTTs, the GTA is very keen in understanding the beneficial ownership of payments before granting a relief. There is a pay and reclaim mechanism for availing treaty benefits, and the payee has to file a refund application to the GTA in order to avail the treaty benefits.