Qatar Tax & Business Guide - Deloitte

Basic facts
Population 910,000 Inflation 11.8% (2006)*
Main languages Arabic; English widely used GDP per head US$61,890*
Currency Qatari riyal (QAR) GDP growth 7.1% (2006)*
Economic communities WTO, Gulf Co-operation Council (GCC)
GDP sources 0.1% agriculture, 75.8% industry, 24.1% services
*Economist Intelligence Unit estimates.
Political environment

Qatar is an emirate. The emir, Sheikh Hamad bin Khalifa al-Thani, is head of state. The cabinet is headed by the prime minister, who is appointed by the emir. The prime minister, Abdullah bin Khalifa al-Thani, was replaced by the first deputy prime minister and minister of foreign affairs, Hamad bin Jassem bin Jabr al-Thani, in April 2007.
Foreign trade and investment
Exports US$30.6bn (2006)* Imports US$12.4bn (2006)*
*Economist Intelligence Unit estimates.

Leading export markets: Japan, Korea and Singapore.

Major exports: Oil and refined petroleum products, and liquefied natural gas.
Business and financing
Business forms Limited liability company, public shareholding company, branch

Other forms of business include a simple partnership, joint partnership, limited share partnership and joint venture.

In general, foreigners may only own up to 49% of a Qatari-registered company. However, foreign investors may increase their shareholding to 100% in respect of certain activities.
Labour environment
Unemployment rate 3.2%* Minimum wage None
*Economist Intelligence Unit estimate.

There are no trade unions in Qatar, and disputes are sent to the Ministry of Labour for arbitration.
Taxation
Corporate tax
Main rate Marginal rates to 35%

Income tax is levied on business entities (that is foreign companies, partnerships and individuals) operating in Qatar, whether they operate through branches or through limited liability companies with local partners.

The rates are 0% for income up to QAR 100,000 and up to 35% for income exceeding QAR 5m. Tax is not levied on wholly owned Qatari business. For income tax purposes, nationals of Gulf Co-operation Council (GCC) states are considered Qatari citizens.
Individual tax
Income of individuals is not taxed

There is no taxation on the income of individuals.
Capital gains
Company gains taxed as income

Capital gains of companies are included in taxable income and taxed at the normal rates. Gains of individuals are not taxed.
Indirect tax
No consumption taxes

There are no consumption taxes in Qatar.
Tax administration and compliance
Tax year Corporations: calendar year; Individuals: not taxed

The tax year-end in Qatar is normally December 31st, although the taxpayer may, after obtaining approval from the tax authorities, adopt a different year-end. Taxpayers are required to submit an annual income tax return and payment of tax by the end of the fourth month after the companyÌs financial year-end.
Retentions from contract payments

Although there are no withholding taxes in Qatar, all ministries, government departments, public and semi-public establishments, and other taxpayers are required to withhold final payments to subcontractors pending receipt of a tax clearance certificate issued by the Income Tax Department. In practice, the tax authorities have confirmed verbally that 5% of the total contract value should be withheld from the total contract payment.
Additional tax information
Withholding taxes There are no withholding taxes.
Tax treaties Qatar has concluded more than 20 tax treaties.
Dividends Generally, dividends received from income that has already been subject to tax are not taxable in the hands of the recipient company.
Revenue protection There is no transfer-pricing or anti-haven (CFC) legislation.
Groups There is no provision for group taxation.
Incentives Tax holidays; Foreign capital investment; Qatar Financial Centre; Investment free zone.
Other taxes Municipality fees.