Foreign tax credit
The executive regulations of Qatar’s tax law provide that income tax paid outside Qatar is deductible as an expense for the purposes of determining taxable income, provided such income is taxable in Qatar.
Other tax exemptions
Under the State regime, an application for a tax exemption may be made for certain projects that are considered to be strategically significant to the Qatar economy. The exemptions are generally granted for a period of five or ten years. Applications for an exemption are assessed based on certain criteria set out in the Qatar tax law.
Notwithstanding the fact that an exemption is granted, an entity that is exempt is still required to file a tax return under the Qatar tax law.
In addition to the above, Qatar has two special regimes that provides tax exemptions to entities that fulfil certain criteria.
Special Tax Regimes
Qatar Science and Technology Park (QSTP)
Qatar has established the QSTP, which is aimed at entities with research and development (R&D) activities. QSTP entities can be fully exempt from Qatar tax; however, tax-exempt entities are still required to file tax returns and apply WHT on payments to non-residents.
Qatar Free Zones
In 2018, the Qatar Free Zone Authority (QFZA) was set up as an independent entity to develop Free Zones in Qatar. It currently oversees two free zones: an Airport Free Zone (Ras Bufontas) and a Port Free Zone (Um Al Houl). The Airport Free Zone focuses on light manufacturing, international business services, the aviation sector, emerging technologies, and logistics hubs. The Port Free Zone focuses on maritime industries, heavy manufacturing, industrial sectors, emerging technologies, and logistics hubs.
Benefits of setting up in one of the Free Zones include 100% foreign ownership and a 20-year tax holiday (i.e. zero corporate tax, zero customs duties, and no personal income tax).