One of the core planning that every business needs to go ahead with is tax planning. It serves out to be an art performed by professional experts to reduce the tax amount to be paid to the government for a specific period. After the company registration process in Qatar, the next move should be tax planning. According to the Ministry of Economy and Commerce and the Qatar Tax Department, all companies in Qatar needs to draw up their final statements as per the International Accounting Standards (IAS). If you are planning to set up a company in Qatar, you need to know the system of taxation in Qatar.
Qatar Tax
Qatar, one of the Arabian Peninsula countries has been drastically molding itself into a business investment hub. The country holds itself as one among the GCC countries and has been one of the eye-catching destinations for business investors, the main reason being the flexible tax structure. Here are a few types of tax imposed in Qatar.
1. Company Tax
The corporate tax in Qatar is subjected to a payment of 10%. The nation holds a position among the lowest tax rate countries in the world.
2. Withholding Tax
It includes:
Dividends
Qatar doesn’t levy on withholding tax on dividends.
Interest
Along with certain exceptions, the interest stands at 7%.
Royalties
Subjected to 5%.
Technical Service Fees
Subjected to 5%, payable to non-residents.
Other
A rate of 7% is applicable to commissions, brokerage, and attendance fees.
Retention
A retention tax of 3% is applicable.
3. Qatar Income Tax
It is to be noted that Qatar does not levy any specific tax on the salaries and wages of individuals. It also gives flexibility of exemption for equity shares, profits gained on bank deposits, etc.
4. Selective Tax
The Qatari govt. has planned to levy a special tax on harmful goods or health-destroying goods. It includes 100% tax on tobacco products, 50% on all sugary drinks.
5. VAT
The implementation of VAT in Qatar will come into force by 1st Jan 2019. According to the GCC VAT Framework, all the GCC countries are expected to impose VAT at a rate of 5%.
Thus, you have got a clear idea regarding the number of taxes available in Qatar. Next, let’s have a look at the main business sources of tax in Qatar.
Taxable Sources in Qatar
The main categories of taxable sources in Qatar include:
- Activities carried out in Qatar
- Contracts wholly or partially performed in Qatar
- Real Estate in Qatar
- Loans and interest obtained
- Extraction of natural resources situated in Qatar
Now, the overhead stated points are the core sources through which taxes are charged in Qatar. Being a business owner or an entrepreneur, one should be aware of Double Tax Agreement. Do read below.
Double Tax Relief in Qatar
The concept of double taxation is to wipe out the double tax that needs to be borne during the import-export process. The implementation of double tax treaties helps countries to enter into multiple business agreements without the fear of bearing double taxes. Till date, Qatar has signed more than 60+ tax treaties. This attracts foreign investors to a great extent. Moving ahead let’s have a look at…
Qatar’s New Tax Laws
According to the new laws planned by the Qatari government, every business entity needs to follow the below stated:
- A decision has been made by the Qatari government to implement General Tax
- Certain exemptions are to be made on specific economic sectors
- No income tax to be levied on Qatari residents and citizens
- Selective-tax would be implemented on harmful goods
- VAT to be implemented by 2019
Thus, it can be easily understood that existing or new business entities need to abide by the Qatari tax system so as to sustain in the nation’s economy. Dealing with the taxation procedures turns out to be complex towards the end. So, for business entities, it turns out to be a feasible option to outsource the taxation services to professional experts who can deeply analyze the tax amount needs to be paid. Tensed? Don’t worry! We have got it all covered.
Our Taxation Services
At Xecellence, we stress on understanding the financial scenario of the business entity. Our tax-related services in Qatar include:
- Developing tax strategies
- Lessen the tax liabilities
- Analyze the business income and tax to be paid
- Filing Status and deductions
- Selection of investments
Why Us?
Xecellence stands as one of the leading business and tax advisors in the Middle East. We are a team of experts dedicated to company establishment process, along with accounting, taxation, legal and visa services. If you are planning to opt for taxation service or have any query, do contact us – we’d be happy to assist you.
