Laws And Regulations
The tax regime in Qatar, rated as the world’s third least demanding, implements international best practices through two main taxation entities, the General Tax Authority (GTA) and the Qatar Financial Centre (QFC) Tax Authority. The QFC tax regime applies to all QFC-licensed firms, while the rest of businesses operating in Qatar are subject to the State of Qatar's tax regime administered by GTA.
For more information, please refer to the websites at the end of the page
The state’s tax legislations are derived by three main laws the Income Tax Law (Law No. 24 of 2018), the Excise Tax Law (Law No. 25 of 2018), and the QFC Tax Law and Regulations. Qatar has 84 tax treaties in force and is also a signatory of the Organisation for Economic Co-operation and Development Multilateral Instrument (OECD MLI).
Firms under the umbrella of the State of Qatar's tax regime must adhere to the International Financial Reporting Standards (IFRS). On the other hand, the QFC tax regime uses multiple frameworks including IFRS, US Generally Accepted Accounting Practice (GAAP), UK GAAP and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards. Financial statements under both regimes must be submitted in the Arabic language, starting 1 January 2020.
Different forms of companies are allowed to operate in Qatar under the Ministry of Commerce and Industry (MOCI) including limited liability company, limited partnership, limited share partnership, joint liability company, joint venture company, shareholding company (public or private), branch of a foreign company, and holding company. Additionally, the QFC allows for a variety of business set-ups including limited liability company, limited partnership, limited liability partnership, general partnership, branch, holding company, special purpose company, single family office, and trust.
All taxpayers operating businesses in Qatar must obtain tax cards from the GTA. Applications should be submitted within 30 days from commencing activities or registering with the Ministry of Commerce and Industry Commercial Register. Failing to register with the GTA or to maintain a tax card validity may result in a QAR20,000 penalty. A body corporate is considered resident, if it is formed and registered under Qatari law or if it conducts business through a head office or place of effective management in Qatar.
Qatar’s tax law defines a Permanent Establishment (PE) as a fixed place of business through which a taxpayer, fully or partially, carries on their business. It also allows for the creation of a PE by a dependent agent, a person acting on behalf of or in the interest of the taxpayer other than an independent agent. As stipulated by law, a PE would exist for projects or services carried on for more than 6 months (183 days) in a 12-months period. A company having a PE in the country is subject to corporate income tax. Filing an online tax return requires a PE to be commercially registered.
Taxable income: Regardless of the place of incorporation, a wholly or partially foreign-owned company that derives income from Qatari sources is taxable in Qatar. Taxed income includes the gross income obtained through:
- Activities performed in Qatar
- Contracts wholly or partly carried out in Qatar
- Consideration for services paid to a head office, branch or related company
- Real estate located in Qatar
- Exploring, extracting or exploiting natural resources in Qatar
- Interest on loans obtained in Qatar
The amount of net taxed income is determined after the deduction of expenditures incurred to earn the gross income, including the following:
- Employee costs; salaries, wages, end of services benefits and other similar payments
- Raw materials, consumables and services necessary to perform an activity
- Rental fees
- Insurance premiums
- Interest on loans attributable to the activity
- Assets depreciation at specified rates
- Uncollectible accounts expenses in accordance with law-set criteria
- Aids, donations, and subscriptions to charitable, humanitarian, scientific, cultural or sporting activities paid to governmental authorities, public institutions, or other licensed bodies in Qatar up to 5% of the net taxed income prior to making deductions for the same taxable year
- Entertainment and recreational expenses, up to 2% of the net taxed income prior to making deductions for the same taxable year
The QFC tax regime classifies taxable profits as local source if they arise in or derive from Qatar. Profits generated by QFC's unregulated firms from local services intended for use outside the country are considered non-taxable.
Taxable income is subject to a Corporate Income Tax rate of 10% under the State of Qatar's tax regime. However, a different rate may apply to taxpayers carrying out activities under agreements with the government or engaged in the oil and gas sector.
As defined under law No. 3 of 2007, a 35% tax rate applies to income derived from petroleum or petrochemicals operations including:
- Field development
- Well completion and repair
- Petroleum processing and production
- Impurifies filteration
- Transporting, storing, loading and shipping
- Equipment and establishments necessary for industrial operations
- Construction and operation of related energy and water or other facilities
- Complementary and administrative services required to achieve the above operations
Where a special agreement was signed with the Qatari government prior to Law No. 3 effective date, the rate specified in the government will apply. A tax rate of 35% will be used if the agreements does not specify a rate.
A QFC-Entity is taxed a 10 % flat rate of its taxable profit according to the QFC tax regime.
Taxed as ordinary income at 10% under both tax regimes. Non-taxable income: Both, the State of Qatar's and the QFC tax regimes, do not levy corporate income tax on entities wholly owned by Qatari and GCC nationals. However, such entities may be required to file tax returns (see under 4.1.6 Compliance for corporations). Dividends of taxable companies, wholly or partially foreign-owned, are also not subject to tax under both tax regimes.
Surtax and alternative minimum tax are not applicable in Qatar under both tax regimes. the State of Qatar's tax regime does not allow for foreign tax credit. QFC firms can benefit from double taxation and unilateral credit relief.
Losses can be carried forward, deducted from the net income of subsequent years, under both tax regimes. This excludes losses resulting from an exempt or non-taxable source of income. the State of Qatar's tax regime allows for a forward period of 5 years, while the QFC tax regime allows a forward with no limit of time as long as the QFC entity continues to generate income. Both regimes do not allow losses to be carried back.
The State of Qatar's tax regime allows for the tax exemption of qualifying for up to five years, subject to approval by the Minister of Finance. Companies seeking longer periods of exemptions shall obtain the approval of the Council of Ministers. However, the regime does not provide participation exemption and foreign companies selling shares in Qatar-based companies are taxed. On the other hand, the QFC tax regime provides exemption on capital gains earned by qualifying shareholdings.
The General Authority of Customs (GAC) is the competent government authority responsible for monitoring and implementing all import and export regulations, working closely with other public and private agencies to ensure compliance with Qatar’s customs legislation. The GAC’s powers extend within the country’s territories and territorial waters and are not restricted to customs administration zones.
Since 2018, the GAC, alongside Qatar Chamber (QC) and the International Chamber of Commerce (ICC), has been applying the ATA “Admission Temporaire/Temporary Admission” Carnet system, an international customs document that allows temporary tax and duty free import and export of certain goods for up to one year. Qatar is a long-time member of the World Customs Organization (WCO) and the GCC Customs Union and a signatory to the Unified Economic Agreement of the GCC states.
The State’s customs legislations are derived mainly from Law No. 40 of 2002 and the Executive Regulations thereof. Other laws in force include Law No. 41/2002 (the GCC Unified Customs Law) and Law No. 40/2004 (the Common Customs Law of the GCC States), and the Executive Regulations thereof issued by the Prime Minister decision No. 21/2004. Any goods crossing the Customs Line, at importation or exportation, shall be subject to the provision of customs laws.
Imports and exports are transited though Hamad Port, Doha Port, Mesaieed Port, Hamad International Airport, Ras Laffan and the Salwa Overland Terminal.
Importers must submit the required attested, translated and verified documents necessary to clear their goods from customs zones. Documents include; a valid import license, detailed customs declaration form, manifest, pro forma invoice, certificate of origin and bill of lading. These requirements apply to sea, air and land freight. Should a discrepancy between the actual goods and the documents provided arise upon inspection, additional duties shall apply in addition to a fine. Failure to comply with customs regulations and requirements can result in penalties, demurrage charges, delays, holding of goods or sending goods back to their origin.
Al Nadeeb, Qatar Customs Clearance Single Window, provides seamless customs clearance procedures through a web-based platform to exporters, importers and clearing agents. Users may benefit from a range of online features including; declaration submission, follow-up and auto-rotation to the relevant government agency, clearing agent authorization, online duty calculation and payment, as well as instant access to customs records and forms. The system is fully integrated with other e-government systems and international trading communities.
In alignment with the GCC Customs Union, Qatar imposes a 5% ad valorem tariff on the value of cost, insurance and freight (CIF) invoice of general cargo goods, excluding those exempted by law provisions. The tariff may also include a fixed amount levied on each unit of the goods. The limited tariff exceptions are:
- Records and music instruments: 15%
- Steel: 20%
- Urea and ammonia: 30%
- Alcoholic beverages: 100%
- Cigarettes and tobacco products: 100% or QAR 1,000 per 10,000 cigarettes whichever is higher
There are more than 600 duty-exempt goods under the GCC Customs Union in addition to exemptions granted to specific bodies by Law No. 40 of 2004. These include:
- Goods for charitable use
- Good for Free Zones and Duty-Free Shops
- Basic food products such as fresh fruit and vegetables, rice, wheat, flour and feed grains
- Passenger accompanied luggage
- Personal effects
- Used household items
- Returned goods
- Goods in transit collected at designated stations
- Products benefiting from temporary exemption by ATA Carnet
- Machinery, raw materials and semi-manufactured items unavailable in the domestic market and imported by certain foreign investment projects
- Ammunition and explosives
- Flammable goods
- Radioactive material
- Narcotic drugs
- Goods infringing artistic, industrial, intellectual, and commercial property rights
- Goods from boycotted countries
Generally conducted at customs stations; goods are inspected for their quantity, properties and value, either partially (samples inspected) or fully (all items inspected). Inspection usually takes place in the presence of the owner or delegate. However, in the event of clearance officers suspecting prohibited or improperly declared goods, goods may be opened in the absence of the owner if they fail to show at the pre-notified time. Under exceptional circumstances goods may be inspected prior to notifying the owner.
In case of warranted examination, the cost of transport to the examination location, packaging and repackaging shall lie at the expense of the owner. Prohibited, harmful or dangerous goods may be reexported or destroyed.
As the country’s economy continues to diversify, new job opportunities are emerging across all sectors.
Companies and government agencies welcome progressive hiring practices, as people around the world look to Qatar for employment.
The government understands that the country’s greatest asset is its people.
The process of Qatarization involves bringing more and more citizens into helping build the economy, thus laying the foundation for a secure future. The State is committed to keeping up with international labour standards to make Qatar one of the best places to work and live.
Qatar is keen on conducting a labour force survey on a quarterly basis, with the aim of getting accurate data on the size of labour in Qatar, the unemployment rate and the labour market needs, which paves the way for setting up plans and policies that are part of Qatar National Vision 2030 (QNV 2030).
Qatar’s National Vision 2030 promotes the importance of a capable workforce committed to business ethics and outlines a strategy to increase and diversify the participation of Qataris in the workforce, as well as attract expatriate talent and labour while protecting rights and ensuring safety.
QNV 2030 is backed by Qatari laws which ensure the protection of workers’ rights in accordance with international conventions. In this context, the labour law has been issued to regulate the relationship between employers and their employees.
Qatar is an attractive country for expatriate workers and has one of the lowest unemployment rates in the world with an abundance of job opportunities in both the public and private sectors. In the past five years, the number of expatriate workers has increased to over a million.
In the preparations for the 2022 World Cup, Qatar offers nearly 2 million job opportunities: 1.5 million in the World Cup projects alone, and 0.5 million jobs in infrastructure projects.
Qatar offers jobs to almost 90% of expatriates, who work in various sectors in jobs that are considered the best in the world, according to international reports.
Job seekers can search for jobs through the media, or Qatari, Arab and foreign employment websites, which offer many diverse jobs and are updated frequently. Qataris can also search for a governmental job through the Ministry of Labor website.
Qatar provides a rewarding work environment and offers the highest salaries. Experts predict that Qatar will be the country of the highest salaries among the GCC countries in the future, with more than $200 billion of investment in infrastructure in the coming years. What’s more, most employees benefit from either tax-free or low taxed salaries.
After obtaining a residence permit, make sure you document your employment contract at the Ministry of Labor, and that the contract includes the job title, working hours, salary, and other privileges. This must be in Arabic because it is the approved language.
To drive greater competition in Qatar’s labour market and protect employees’ rights while further developing an empowering and business-friendly climate in the country, the Ministry of Administrative Development, Labour and Social Affairs (ADLSA) recently introduced a non-discriminatory national minimum wage and placed new measures to facilitate the flow of talent across sectors and enterprises.
The new Law (No. 17 of 2020) on the Minimum Wage for Workers and Domestic Workers sets the minimum basic wage for all private-sector employees and domestic workers at QAR1,000 per month. This is in addition to providing monthly allowances of QAR500 for accommodation and QAR300 for food expenses, bringing the total to QAR1,800 per month – unless the employer provides accommodation and/or food to an employee as part of their recruitment package.
In parallel, amendments to Qatar’s Labour Law No. 14 of 2004 and Decree-Law No. 19 of 2020 were made with the introduction of Decree-Law No. 18 of 2020, which enhances employees’ ability to change employers by removing the No-Objection Certificate requirement.
The rules for setting up and operating a company in Qatar are provided in Commercial Companies Law No. 11 (2015). For example, a company must be Qatari-owned; it must be headquartered in Qatar.
The Commercial Companies Law provides for the following types of legal entities that may be formed and registered in the State of Qatar:
- Joint Liability Company
- Limited Partnership
- Joint Venture Company
- Public Shareholding Company
- Private Shareholding Company
- Partnership Limited by Shares
- Limited Liability Company
- Holding Company
In addition to the types of company mentioned above, there is a number of different commercial partnership arrangements that exist. A partnership company comprises two or more partners who are jointly responsible for the liabilities of the company. All joint partners must be Qatari national citizens. Each partner possesses the power to conduct commercial business under the name of the company. However, no partner is allowed to practice on his/her own or another’s account without first getting approval from the other company partner or partners. Limited partners, on the other hand, are only liable on debts incurred by the company to the extent of their registered investment. They have no management authority. An equities partnership company comprises two teams; one includes one or more partners jointly responsible for the debts of the company in all their assets; the other includes shareholders.
Companies formed through a shareholding arrangement must first be approved by the Ministry of Commerce and Industry (MOCI) prior to the company being established. The basic criteria are as follows: the shareholding company’s capital should be distributed to negotiable shares of equal value; the number of shareholders cannot be fewer than five; and all shareholders must be Qatari. In addition, an elected board of directors will be responsible for managing the shareholding company. The number of board members should be between five and 11 members. Each board member can be elected more than once unless stipulated otherwise in the statute of the company. Each board member should not exceed a term of three years in office.
In keeping with the goals articulated in its Qatar National Vision 2030, Qatar has implemented legislation aimed at attracting foreign investment in different sectors of the economy and facilitating investors’ access to the Qatari market. Foreign Investment Law (Law No. 1 of 2019) provides for the establishment of 100% foreign-owned companies, along with a few incentives and benefits for non-Qatar investors or in accordance with the regulations outlined by the law.
The incentives provided by the foreign investment law for non-Qatari investors are as follows:
1. Allocation of land for the establishment of investment projects through rent or usufruct.
2. Exemption from income tax as stipulated under Income Tax Law.
3. Exemption from customs duties on the following:
- Project Machinery and Equipment.
- Raw and semi-manufactured goods required for production, that are unavailable locally.
4. Expropriation only for the public interest and in a non-discriminatory matter and investors are to be paid fair compensation.
5. Provision to transfer the ownership of the investment to any other investor or relinquish it in favor of the national partner in case of a joint venture.
6. Except for labor disputes, settling disputes with third parties through arbitration or any other means of dispute settlement.
The council of ministers may grant investment project incentives and benefits in addition to the incentives provided by law on the suggestion of the Minister.
The 100% foreign ownership law does not apply to banking and insurance sectors, companies engaged in the exploitation of natural resources, commercial agencies, and any other sectors decided by the council of ministers.