Qatar

A unified 5% WHT applies to all services that are used, utilised, or benefited in the State of Qatar even if they are carried out in whole or part outside the State.

WHT also applies to, among others, interest, royalties, technical fees, commissions, brokerage fees, and other payments for services. The Regulations have excluded certain payments from the scope of WHT. Dividends are not subject to WHT.

New provisions have also been introduced whereby certain unpaid amounts are 'deemed' as having been paid for WHT purposes if they remain unpaid for a certain specified period.

WHT only applies if the payment is made to non-resident individuals or companies with respect to activities not connected to a PE in Qatar. Since residents and non-residents with a PE in Qatar should have a tax card, in practice, the WHT only applies if payments are made to service providers who do not hold a valid tax card.

The company or a branch that makes the payment to its foreign supplier is required to withhold the tax and remit to the GTA the funds that were withheld by the 16th day of the following month. In the event that the company does not make a payment to the GTA, the company will be liable for penalties.

All monthly WHT statements will have to be filed online in Dhareeba.

Retention system

A retention system is in place whereby certain final contract amounts are required to be retained from payments made to a temporary branch in Qatar. Companies resident in Qatar and permanent branches are effectively not subject to the retention rules because they can secure a release of the final payment by presenting a tax card.

The retention is equivalent to the higher of 3% of the contract value (less the value of supply and work carried out abroad) or the final contractual payment until the temporary branch produces a no objection letter from the GTA.

In October 2022, the GTA issued a publication providing much needed guidelines on the procedure and requirements in order to obtain a no objection certificate (NOC) for the release of these retentions. As per the publication, taxpayers are required to provide certain information and documents as a part of their NOC request (including several accounting details, details of the relevant contract, and a contract completion certificate).

Tax treaties

In case a relief from WHT is available under a double tax treaty (DTT), Qatar has a pay and reclaim mechanism (i.e. the payer is required to withhold and pay to the GTA). The payee will have to file a refund application to the GTA in order to avail the relief provided under the DTT.

The WHT rates under these treaties in respect of dividends, interest, and royalties are as follows:

* Dividends are not subject to WHT according to domestic tax law of Qatar.

Notes

1. 0% if the beneficial owner is a government of a contracting state, 10% if the beneficial owner is a company that directly holds at least 25% of the capital of the paying company. 15% in all other cases.
2. 5% if capital exceeds 100,000 United States dollars (USD), and 10% in all other cases.
3. 0% if the beneficial owner is a company that owns at least 10%, 5% if 10% direct participation is held by an individual who has resided in the relevant state for a period of at least 48 months, and 10% in all other cases.
4. 5% if the beneficial owner is a company that has owned, directly or indirectly, at least 25%, and 10% if participation is less than 25%.
5. 5% if the beneficial owner is a company that owns at least 10%, and 10% in all other cases (i.e. less than 10% shareholding).
6. 0% if the beneficial owner is a company that owns at least 7.5%, and 10% in all other cases (i.e. less than 7.5% shareholding).
7. 5% if the beneficial owner is a company that owns at least 10%, and 15% in all other cases (i.e. less than 10% shareholding).
8. 5% if the beneficial owner is a company that directly holds at least 10%, 10% if the beneficial owner is an individual that directly holds at least 10%, and 15% in all other cases.
9. 5% if the beneficial owner is a government or public institution wholly owned by the government or where the beneficial owner of the company (excluding partnership) holds at least 20%, and 10% in all other cases.
10. 0% where the beneficial owner of the interest carries on business in the other contracting state where the interest arises (i.e. through a PE therein), and 5% if the contracting company does not have a PE.
11. 0% if interest arising in contracting state is derived from government debt, and 10% if the contracting company does not have a PE.
12. It should be noted that there is limited information available in respect of the treaty with this country, and the date provided above may be the date on which the treaty was signed or entered into force rather than its effective date.
13. Reduced to zero if the beneficial owner has a PE in the contracting state.
14. 0% if the beneficial owner is a company, and 5% in all other cases.
15. 5% if the beneficial owner is a bank, and 10% in all other cases.
16. 5% of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) that directly holds at least 20% of the capital of the company paying the dividends. 7.5% in all other cases.
17. 0% if the interest derived from a contracting state and paid for the government or the central bank in the other state. 10% in all other cases.
18. 5% of the gross amount of the dividends if the beneficial owner is a company that holds, directly or indirectly, at least 50% of the capital of the company paying the dividends or has invested more than USD 10 million in the capital of the company paying the dividends. 12.5% in all other cases.
19. 5% of the gross amount of the royalties in respect of payments of any kind received as a consideration for the use of, or the right to use, any patent, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial, or scientific experience. 10% in all other cases.
20. 5% if the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the company paying the dividends.
21. 0% if the interest is derived from government debt or arises in respect of any debt instrument listed on a recognised stock exchange. 10% in all other cases.
22. 5% if the beneficial owner is a company that has owned, directly or indirectly, for the period of six months ending on the date on which entitlement to the dividends is determined, at least 10% of the voting power or of the total issued shares of the company paying the dividends, and if the company paying the dividends is not entitled to a tax deduction of dividends. 10% in all other cases.
23. 0% if interest is derived from government debt or if the beneficial owner is either: (i) a bank, (ii) an insurance company, (iii) a securities dealer, or (iv) any other enterprise, provided that, in the three taxable years preceding the taxable year in which the interest is paid, the enterprise derives more than 50% of its liabilities from the issuance of bonds in the financial markets or from taking deposits at interest and more than 50% of the assets of the enterprise consist of debt-claims against persons that are not associated with the enterprise. 10% in all other cases.
24. 10% if the beneficial owner is a company (excluding partnerships) that directly holds at least 10% of the capital of the paying company. 15% in all other cases.
25. 0% if dividends are paid to the other contracting state. 5% if the beneficial owner is a company (other than a partnership) that holds at least 10% of the capital of the company paying the dividends. 10% in all other cases.
26. 0% if the beneficial owner of the interest is the other contracting state, its political subdivisions, local authorities, statutory bodies, Central Bank, or any entity wholly owned, directly or indirectly, by that other state, including, in the case of Qatar, Qatar Investment Authority and Qatar Holding.
27. 0% if the beneficial owner is a company that directly holds at least 10% of the capital of the payer company; or the beneficial owner is an entity wholly owned by the other state or authority, if that state, authority, or entity directly holds at least 5% of the capital of the payer company; or the dividends are paid by a company whose shares are substantially and regularly traded on a stock exchange of one of the contracting states, and the beneficial owner is a resident of the other state who directly holds at least 1% of the capital of the payer company; or in some other cases.