Tax Declaration In Qatar: Step-by-Step Guide

Navigating the tax landscape in Qatar can seem like a journey through a maze of regulations and requirements. Don’t Worry! We’ve got your back in this!

Whether you’re a long-standing resident or a newcomer to the vibrant economy of Qatar, understanding the ins and outs of tax declarations is crucial. This guide is your compass, designed to simplify the complexities of tax compliance, ensuring you can fulfill your fiscal responsibilities with ease and confidence.

Let’s dive in!

How Is The Tax System In Qatar?

Generally speaking, there are relatively few taxes to pay in Qatar compared to other countries. Indeed, there is no income tax on personal income, inheritance, or property taxes.

In addition to this, there is currently no Value Added Tax (VAT) to pay, either. However, this may be implemented shortly.

That said, certain products deemed harmful by the Qatari authorities – including tobacco and most carbonated drinks – are liable for excise taxes and, therefore, more expensive.

Depending on your situation, you might also have to pay withholding and corporate taxes if you run a foreign-owned business that derives income from Qatari sources.

What Are The Federal Taxes In Qatar?

Income Tax In Qatar

Qatar does not levy income tax on individuals’ salaries, wages, or allowances. This is regardless of whether you’re an expat or a Qatari national.

However, anyone engaging in commercial activity for profit must pay tax. This includes self-employed workers in Qatar.

The money you earn won’t be paid through an employer, but rather from your own business, so you’ll be taxed like other businesses.

Whether or not you’ll have to pay depends on whether the money you make is from a qualifying income source within Qatar.

If any self-employed income does come within the scope of Qatari corporate tax, you’ll pay at a rate of 10%.

As Qatar has a territorial tax system, you’ll need to pay the tax regardless of whether you’re a Qatari tax resident.

You’re considered a tax resident if any of the following applies:

You have a permanent home in the state of Qatar
You have been in Qatar for more than 183 days in 12 months
The center of your vital interests is linked to Qatar. Vital interests could include Qatar, where someone’s close family lives.

Individual Tax

Due to Qatar’s small population and high GDP, individuals don’t have to pay social security taxes. However, employers must pay social insurance for Qatari employees.

Qatari nationals automatically qualify for state-provided medical care, pensions, maternity pay, childcare, and unemployment benefits.

The same does not apply to expats. Foreigners can access medical assistance but don’t qualify for other state benefits.

For this reason, investing in things like health insurance is sensible so you can access private healthcare.

Corporate Tax In Qatar

Not all companies in Qatar have to pay corporate tax.

Companies wholly owned by Qatari or Gulf Cooperation Council (GCC) nationals are not liable for corporate income tax (CIT).

The GCC includes Qatar, the United Arab Emirates, Saudi Arabia, Kuwait, Oman, and Bahrain.

However, wholly or partly foreign-owned companies with income sources in Qatar will be liable for CIT in Qatar. CIT is usually a flat rate of 10%, but companies with oil and gas operations may pay 35%.

Employers must also pay social insurance for any Qatari nationals, equal to 10% of the employee’s salary.

Investment Taxes

If you’re thinking about investing in Qatar as an expat, the good news is you’re unlikely to pay tax on investment growth.

According to Deloitte, there is also no dividend tax to pay if the income received is from profits that have already been subject to Qatari tax or from a company exempt from tax in Qatar.

Dividends from company shares are tax-free, and you don’t pay withholding tax on dividend income either.

Foreign companies that later sell shares in Qatar-based companies may be subject to tax in Qatar – a rate of 10% is likely to be charged on certain capital gains.

Capital Gains Tax

Individuals who make capital gains from selling property and securities usually won’t have to pay any tax.

However, if gains are earned by non-Qatari residents due to selling assets considered to be Qatar-sourced – such as property in Qatar, for example – they’ll pay a 10% capital gains tax.

You must file a capital gains tax return if you have to pay tax on your gains.

You must file a return within 30 days of the sale or 30 days of the contract’s conclusion, whichever is sooner.

Double Taxation

Qatar has more than 80 double-taxation agreements in place with countries worldwide.

These countries include Austria, France, Hong Kong, and the United Kingdom, among many more.

This prevents expats from paying tax twice on the same income, encouraging more foreign investment.

For more information and a complete list of these countries, visit the Qatar Financial Centre website.

Property Taxes

There are no property taxes to pay in Qatar. However, the government may charge fees when you register a purchased property.

The buyer pays this fee – there aren’t any selling costs like stamp duty.

Landlords may also pay fees to the Real Estate Lease Contracts Office for registering leases. This is usually 1% of the annual rental value of the property.

Expats can only buy properties in specific areas of Qatar, like The Pearl and West Bay Lagoon. However, once you buy a property, you’ll get Qatari residence for as long as you own the property.

Inheritance Tax

There are no inheritance, estate, or gift taxes in Qatar.

This means you won’t need to worry about your heirs having to pay any taxes on the inheritance they receive, and there are no restrictions on what you can leave them.

However, having a will in place is still a good idea. If you don’t have an heir living in Qatar, Qatari law applies to any assets you own.

This means that any property, benefits, and financial rights are transferred to those entitled to inherit it.

But, if you don’t have any beneficiaries deemed to have inheritance rights under Qatari law, your assets could be devolved to the state.

Those entitled to inherit an estate are listed in article 251 of the legislation Promulgating ‘The Family Law’.

Luxury And Excise Taxes

Qatar introduced an excise tax (PDF) in 2019. The tax only applies to a few harmful or prohibited products by the Islamic faith.

These include:

Tobacco Products: (taxed at) 100%
Carbonated Drinks (excluding non-flavored carbonated water): 50%
Energy Drinks: 100%
Particular Purpose Goods: 100%.
Special-purpose goods include things like alcohol and pork items.

Withholding Tax

Non-residents may have to pay a 5% withholding tax if they’ve made money from services originating in Qatar.

This rate is the same for individuals, self-employed workers, and companies.

This could happen when a non-resident has made interest from a Qatar-based investment or if a non-resident is paid for services used in Qatar.

Withholding tax applies to royalties, technical fees, commissions, and brokerage fees when paid to a non-resident.

You might not have to pay if you’re connected to a permanent establishment (PE) in Qatar since you’ll usually be issued a tax card, meaning you don’t have to pay.

Moreover, the 5% flat rate can also vary if there’s a tax treaty with the country of your tax residency.

Taxes On Goods And Services (VAT) In Qatar

VAT is expected to be introduced in Qatar very soon, with draft legislation having been debated and discussed by authorities over the past couple of years.

VAT is likely to be introduced at 5% before being increased. Certain goods and services will remain free of VAT or charged at 0%.

In other GCC countries, medicines and medical products have 0% VAT (PDF), as do some goods and services used in education.

Do Expats Have To Declare Income Tax In Qatar?

Most expatriates residing in Qatar do not have to file tax returns, as the country does not impose taxation on wages and salaries.

However, expats who run their businesses or work as self-employed individuals are generally required to pay a 10% income tax and submit a personal tax return.

It is important to note that the taxes applicable to the mentioned sources of income for individuals will also apply to expatriates.

However, expats may still have tax responsibilities based on tax residency regulations and existing international tax agreements in their home countries.

To ensure compliance and explore potential benefits, it is highly recommended that expatriates seek advice from their home country’s tax authorities or consult a qualified tax advisor.

Qatar Income Tax Filing Deadline

In previous years, the original deadline for tax filing in Qatar was 30 April for tax returns covering the year ending on 31 December.

However, in 2023, the General Tax Authority (GTA) extended the tax filing deadline by one month to 31 May.

Please note, however, that this deadline extension may not be provided in 2024.

Therefore, taxpayers should plan to file their tax returns by the original deadline of 30 April unless the GTA announces an official extension.

How To Declare Taxes In Qatar?

Income tax returns can be filed through the Dhareeba portal.

Dhareeba is an electronic system that connects the General Tax Authority and its partners from relevant government agencies to the taxpayers.

It automatically calculates and processes the various types of tax to assist taxpayers in managing their tax transactions according to Qatari tax laws.

Here are the steps for paying your income tax returns on the Dhareeba portal via bank transfer:

Step 1: Log In: Start by clicking “Login” on the Dhareeba portal. Use your National Authentication System Username and Password, then click “Continue.”
Step 2: Dashboard: After logging in, select “Payments/Refunds” and “Total Due Payments.” See the outstanding amount in various currencies.
Step 3: Payment Selection: Review details and check desired payments on the “Payments” screen. Choose the amount and click “Continue to Payment.”
Step 4: Payment Process: Opt for “Bank Transfer” and proceed. Access the “Payment Instructions Slip” for payment details. Remember to include the “Payment Reference Number” in your bank transfer remarks.

How To File Tax Returns In Qatar?

You can access the income tax return form for tax declaration if you are a 100% Qatari/GCC National Resident residing in Qatar.

The steps for doing so are as follows:

Step 1: Log In: Log in to the Dhareeba portal, which will redirect you to the NAS portal, where you can log in using QID or email and password.
Step 2: Access Form: Choose Taxpayer TIN, click “Continue,” then pick “Return/Statement” and “Filing Obligations.” Select Income Tax Obligation to open the Income Tax Return Form.
Step 3: Follow The Steps: Read and follow the provided Instructions, then click “Start Now.”
Step 4: Provide Info: Enter annual revenue, expenses (rentals, salaries, general), and related data.
Step 5: Review Summary: Check the details in the summary: Revenue, expenses, taxable income, tax due, and penalties (if any).
Step 6: Declare And Submit: Complete the declaration with designation, check ‘Terms and Conditions’ and ‘Declaration,’ then click ‘Submit.’ After submission, an acknowledgment appears. Pay if needed or close for later payment.

What Are Tax Rebates And Reliefs In Qatar?

There are several tax-deductible expenditures in Qatar. These include:

Interest on some loans
Charitable contributions
Employee costs
Some office expenses

In addition, Qatar Science and Technology Park (QSTP) entities can be fully exempt from Qatari tax.

However, they must still file tax returns. The country also has Free Zones – if you set up a company in one of these, you pay no corporate tax or customs duties for 20 years.

Tax Avoidance And Evasion In Qatar

The General Tax Authority (GTA) oversees tax in Qatar. Register with them if you have a company, as you could face a fine of QR 20,000 if you neglect to do so.

The country also imposes the following penalties (PDF):

Late Filing Of Tax Return: QR500 per day up to a maximum of QR180,000
Late Payment Of Tax: 2% of the tax due per month up to the total amount
Not submitting annually audited financial statements: QR30,000

Conclusion

With the last dot on your tax declaration now in place, the daunting task of tax compliance in Qatar transforms into a straightforward check on your annual to-do list. This guide aimed to demystify the process, equipping you with the knowledge to navigate Qatar’s tax regulations efficiently.

As you move forward, take pride in your contribution to the economic vitality of Qatar, knowing your fiscal journey here is well-informed and secure.

Compliance Achieved!

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