Corporate Income Tax Compliance in QATAR

Corporate tax in Qatar is instrumental in controlling business activity, especially for foreign-owned businesses. The nation has a territorial tax system, where only income generated within Qatar is taxed. The general corporate income tax (CIT) rate is 10%, which applies to foreign entities, joint ventures with foreign interest, and branches of multinational companies operating within the country.

Businesses involved in the oil and gas industry have a significantly higher tax rate, usually 35%, considering the industry’s strategic nature and profitability. Contrariwise, Qatari or GCC-owned enterprises (Qatari or GCC nationals who are residents of Qatar) are exempted from CIT.

To ensure compliance, Qatar has implemented the Dhareeba tax portal, which simplifies tax reporting and filing. Corporate tax returns are required to be submitted within four months of the end of the financial year, so timely and accurate compliance is crucial to prevent penalties. With changing regulations and particular obligations depending on ownership and activity, knowledge of Qatar’s corporate tax regime is crucial for companies operating in or deriving income from the country.

Who is required to submit corporate income tax?

1. Foreign Companies with Qatar-Sourced Income

   All foreign companies with income derived from Qatar.

2. Joint Ventures with Foreign Partners

 Foreign joint ventures with foreign partners are required to file according to their proportion of profits.

3. Branches of Foreign Corporations

Foreign companies that have operations in Qatar through branches.

4. QFC Registered Entities

Entities registered in the Qatar Financial Centre (QFC) are subject to special tax regulations.

5 . Wholly Foreign-Owned Companies

Foreign-owned companies deriving income in Qatar.

Corporate IncomeTax Rate

The standard corporate tax rate is 10% on taxable income.

Exceptions

• Oil and Gas Sector: 35%.
• Qatari-Owned Companies: Usually exempt from tax.
• QFC Entities: 10%.
• Free Zone Businesses: Can be exempt, depending on certain conditions.

Deadlines

• Corporate Tax Registration Deadline: In Qatar, corporate tax registration must be finalized within 60 days of the date of commercial registration or the first time they generate taxable income.
• Corporate Tax Filing Deadline: Corporate tax returns should be submitted by April 30 of the next year. Some companies have an August 31 deadline, with those companies in the oil and gas industry not being included.

Documents needed for Corporate Income Tax Registration

• Commercial Registration (CR)
• Trade License
• Articles of Association (AOA)
• Shareholders’/Managers’ Passport & QID copies
• Company Address Proof (e.g., lease agreement)
• Contact Details (email & phone)
• Opening Balance Sheet (if available)

STEP-BY-STEP PROCESS FOR CT REGISTRATION

Step 1: Get Commercial Registration (CR)

• Register your company with the Ministry of Commerce and Industry (MOCI).
• This provides you with a legal business license (CR) to do business in Qatar.

Step 2: Open a Taxpayer Account on the Dhareeba Portal

• Go to the Dhareeba portal: https://dhareeba.gov.qa
• Create an account and log in as a new taxpayer.

Step 3: Apply for a Tax Card

• Within 30 days of receiving CR or commencing commercial activity.
• The Tax Card is issued by the General Tax Authority (GTA) through the Dhareeba system.
• Required documents may include:

                1. Copy of CR

                2. Trade License

                3. Articles of Association

                4.Owner/shareholder ID copies

                5 . Company address & contact information

Step 4: Await Approval

• GTA will validate the information and present the Tax Card.
• Upon registration, your business is allotted a Taxpayer Identification Number (TIN).

Documents Required for Corporate Income Tax Filing

1. Commercial Registration (CR)
2. Tax Card
3. QID of Authorized Signatory
4. Audited Financials or Trial Balance
5. Profit & Loss Statement
6. Proof of Advance Tax Payments / Refunds (if any)

STEP-BY-STEP PROCESS FOR CIT FILING

Step 1: Login

 Log in using your QID or email and password to the Dhareeba portal.

Step 2: Dashboa

 Go to “Return/Statement” and choose the Income Tax Obligation of the year.

Step 3: Basic Information

 Choose “Simplified Return,” enter your annual revenue, and specify whether it’s a NIL return.

Step 4: Tax Details

Enter expenses, exempt revenue, and carry forward losses. The system computes your net taxable income and tax payable.

Step 5: Adjustments

  Enter any adjustments for refunds or credits.

Step 6: Additional Information

 Add any required notes or attach supporting documents.

Step 7: Declaration & Submissi

Check the details, accept the terms, and click “Submit.”

Step 8: Acknowledgement

Get a confirmation and reference number if tax is payable, or complete closure if no tax is payable.

Penalties

• Late Registration Penalty: QAR 5,000 for the first offense and QAR 5,000 for every subsequent offense.
• Late Filing Penalty: QAR 1,000 for the first offense and QAR 2,000 for every subsequent offense.
• Late Payment Penalty: 1% per month on the due tax amount.

Conclusion

In summary, corporate taxation in Qatar is a critical part of Qatar’s business climate, with varying tax rates and filing requirements based on the nature of the business and the ownership structure. Foreign-owned corporations, joint ventures with foreign ownership, and foreign corporation branches are required to comply with the corporate tax requirements, whereas Qatari-owned entities and some free-zone operations can enjoy exemptions. The normal rate of taxation is 10%, except for the oil and gas industry, which is taxed at 35%.

To comply, companies are required to register within 60 days of commencing business or earning taxable income and submit their tax returns by April 30 of the subsequent year. The Dhareeba portal simplifies the registration and filing process, allowing companies to easily handle their tax affairs. Companies need to monitor deadlines and not incur penalties for late registration, filing, or payment to ensure seamless operations in the Qatari tax system.