CORPORATE TAXES GENERAL NOTE
The information in this entry is current as of January 1998. For subsequent developments consult the contact listed above.
TAXES ON CORPORATE INCOME
Income and profits tax applies to foreign corporations operating in Qatar and, in the case of a joint venture, only to the foreign venturers share of the joint venture profit. However, income and profits tax can be levied on the profits of any corporate body, wherever incorporated, carrying on a
trade or business in Qatar, although, in practice, tax is not currently levied on any corporate body that is owned by Qatari nationals. A partnership is considered by the tax authorities to be a corporate body. From March 1,1989 nationals from the Gulf Cooperative Council (GCC) countries are to be treated as Qatari nationals.
Tax rates are as follows.
TAXABLE INCOME TAX ON PERCENTAGE
OVER NOT OVER UPPER LIMIT RATE
0 100,000………………… - Nil
QR 100,000 500,000………………… QR 50,000 10
500,000 1,000,000……………… 150,000 15
1,000,000 1,500,000……………… 300,000 20
1,500,000 2,500,000……………… 625,000 25
2,500,000 5,000,000……………… 1,500,000 30
5,000,000…………………………………………………… 35
The tax is computed on a bracket basis in respect of the net profit earned during the year.
CORPORATE RESIDENCE
Corporate residence is not specifically dealt with in the
laws of Qatar.
OTHER TAXES
There are no other taxes, apart from customs duty levied on certain imports.
BRANCH INCOME
Tax rates on branch profits are the same as on corporate profits.
INCOME DETERMINATION
The tax is levied on the income that is earned through the taxpayers activities in Qatar during each tax year. Such income in particular includes the following.
1. Profits earned from any contract performed Qatar.
2. Profits earned from resale of any of the establishments assets.
3. Commissions pay able to agencies or earned through representative agreements or commercial brokerage whether earned within or outside Qatar.
4. Fees payable for consultancy, arbitration or rendering of expertise and similar activities.
5. Earnings from the rental of real estate.
6. Proceeds from sale, license or grant of patent for use; utilization of any trademark, design or patent of an invention; or copyrights.
7. Bad debts recovered by the taxpayer.
8. Net profit of liquidation.
The taxable profit will generally be that reported in audited financial statements to be submitted to the Office of the Income Tax. The audit report must be signed by a locally registered auditor.
Inventory valuation/Qatari taxation
laws do not contain any special provisions regarding inventory valuation.
Capital gains/Capital gains are taxed as ordinary income.
Foreign income/Tax is applied only to profits and income generated in Qatar. However, bank interest earned outside Qatar is also chargeable if earned from the taxpayers activity within Qatar.
Stock dividends/Stock dividends are not specifically dealt with in the
laws.
Other significant items/None.
DEDUCTIONS
Expenditures/Expenditures allowed as deductions include the following.
1. Cost of work completed abroad in relation to a contract in Qatar that cannot be executed locally.
2. Value of foreign imports related to the activity of the branch.
3. Other expenditure incurred inside Qatar.
Depreciation and depletion/Depreciation should be calculated in accordance with rates specified by the tax authorities. There is no specific tax on the sale or transfer of depreciated property.
Net ope
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