An entity that is wholly or partially foreign owned and that derives income from sources in Qatar is taxable in Qatar. In the case of a joint venture, the tax liability of the joint venture is dependent upon the foreign partners’ share of the joint venture's profit. Currently, no corporate income tax (CIT) is levied on a corporate entity that is wholly owned by Qatari nationals and GCC nationals which are resident in Qatar.
Unless specifically exempt from tax, an entity will be taxable in Qatar if it has generated Qatar-source income, regardless of the place of its incorporation.
Taxable income generally is subject to a flat (CIT) rate of 10%, with certain exceptions available.
The following tax rates apply in the specific circumstances noted:
- If a special agreement was reached with the government of Qatar prior to 1 January 2010, the rate specified in the agreement continues to apply. If no rate is specified in the agreement, a rate of 35% will be used.
- The rate applied with respect to oil operations, as defined in Law No. 3 of 2007, may not be less than 35%.
- Payments made to non-residents with respect to certain service activities not connected with a PE in Qatar are subject to withholding taxes (WHTs) (see the Withholding taxes section).
- Provisions introduced by the New Tax Law and its Regulations, may impact a Qatari entity’s tax position with regards to profits attributable to its Qatari shareholding, as new requirements have been introduced which have narrowed the scope of such exemptions and therefore it is recommended that all Qatari entities review their tax positions.
- In addition to the above, fully owned subsidiaries of listed entities are now taxable to the extent of non-exempt ownership (i.e. foreign or non-exempt Qatari/GCC ownership). Previously, there was a perception amongst taxpayers that such subsidiaries were tax exempt.
Local income taxes
There are no local, state, or provincial government taxes on income in Qatar.