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 TYPES OF TAXATION WITH BRIEF :

The Tax Structure – Qatar is a low Tax Country.

 There are no personal taxes, social insurance or other statutory deductions from salaries and wages paid in Qatar.  

 Direct Taxes :

Taxes are levied on a taxpayer's income arising from activities in the State of Qatar. The term activities include:

 Profits realized on any project executed in Qatar;

 Profits realize from the sale of any of the company's assets;
 Commission due to agencies or arising from representation agreements or commercial agency whether such commission is realized in
or outside the State of Qatar;
 Fees paid for consultancy, arbitration or expertise and other related services;
 Rent from property;
 Amounts received from the sale, rent or the assignment of a concession and the use of a trade mark, design, know how or copyright;
 Amounts received from debts previously written-off;
 Profits realized on liquidation.

In addition, interest and other bank income received outside the State of Qatar will be subject to tax in Qatar if this income relates to amounts
arising from the taxpayer's activities in Qatar.
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 Income tax

The previous sliding scale of tax rates applicable to resident foreign business (up to 35 per cent) is abolished and a new flat rate of 10 per cent
has been introduced on the taxable income of eligible tax payers.

Tax payers include:

 companies registered in Qatar;

 foreign entities with a permanent establishment in Qatar; and

 foreign individuals resident in Qatar (excluding employees).

Taxable income includes:

 total income from activity carried out in Qatar;

" interest on loans acquired in Qatar;

 interest earned outside Qatar from amounts generated by activity carried out in Qatar;

 Personal Income Tax

 At present there is no tax on personal income, which is a major factor in many expats decision to accept work in Qatar.

 Corporate Tax

 Until recently corporate tax was 35%. This tax was levied on foreign owned business entities in Qatar - the tax rate for Qatari owned
businesses was zero. However, this tax is to be reduced to just 10%.
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 Import Tax

 Import tax is usually equal to 4% of the value of the good imported, but does vary. (Tobacco incurs a 100% tax - cars are subject to the
normal 4%.) Some items are exempt. There is a detailed description of business tax on Invest in Qatar under Business Set-Up in Qatar.

 Export Taxes

 Export taxes are currently set at zero.

 Value Added Tax

 There is no value added tax per se, however there is a service tax of ten percent and a tax of 5% on hotels and restaurants.

 INDIVIDUAL TAXATION

 Non-resident individuals, other than Qatari and GCC nationals, are taxed only on their business income in Qatar

 RENTAL INCOME

 Leasing property is considered a business activity and rental income is taxed at the standard income tax rates. Income-generating
expenses are deductible when computing for the taxable income.

 CAPITAL GAINS

 Capital gains realized by individuals carrying on a business activity are taxed at the standard income tax rates. Capital gains not related
to business activities are not taxable.
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 Domestic Corporate Taxes

 Under Qatar’s tax legislation, any business activity carried out in Qatar is subject to corporate income tax.

 Income from outside Qatar is not liable to corporate income tax; however, interest and other bank income received from outside of
Qatar, but which relates to income arising from a taxpayer’s business activities in Qatar, is subject to taxation .

 Tax Administration

 The Gregorian calendar is used for Qatar income tax purposes, but a taxpayer may apply to prepare his financial statements for a
twelve-month period ending on a day other than 31 December.

 The first accounting period may be more or less than twelve months, but it should not be less than six months or more than 18 months.

 A taxpayer should keep his accounting records in Qatari Riyals unless permission is obtained from the tax administration for them to be
kept in a foreign currency.  

 Tax Determination

 Tax liabilities are computed in a manner similar to general international practices on the basis of profits disclosed by audited financial
statements, adjusted for tax depreciation and any items disallowed by the ITD.

 If the ITD concludes that the filing is not correct, the ITD can issue an assessment of the payable taxes on a deemed profits basis.

 Such assessments by the ITD may be appealed.

 This option may be exercised by the ITD in the following instances:

 If there are reasons to believe that the declaration submitted by the taxpayer is not correct;
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 If the taxpayer fails to submit a declaration;

 If the taxpayer does not maintain proper books and records;
 If the taxpayer does not provide the information requested by the ITD.

 Deductions

Expenses incurred to earn the taxable income are deductible. These include

 Interest expenses;
 Rent paid;
 Salaries and labour cost, end of service benefits and all related contents including charges allocated to end of service benefits,
 Pension funds and other similar charges;
 Fees and taxes other than income tax;
 Debts written off that are approved by the ITD and which are in accordance with standards established for this purpose.

The following cost and expenses are not considered deductible items:

 Personal and other expenses not related to taxable activities;

 Criminal and tax penalties paid in accordance with this law;
 Expenses or losses that may be recovered under an insurance policy, or a contract, or a compensation claim;
 Depreciation that exceeds cost;
 The branch share of Head Office expenses that exceed the rate determined by the ITD as a proportion of the total branch income.

 Tax Exemptions

 The new Tax Law provides for a Committee to be formed to evaluate applications for tax exemption regarding projects executed by
foreign companies.

 Any contractor who is involved in the execution of an exempt project can apply for exemption from income tax.
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 However, taxpayers who obtain exemption from taxes are required to maintain proper accounting records and should submit financial
statements to the tax authorities within 4 months from the end of the tax year.

 The Law contains provisions, which allow trading losses to be carried forward and set-off against future profits. However, losses cannot
be carried forward for a period exceeding 3 years from the end of the tax year in which the losses were incurred. Losses cannot be set
off against prior year income. 

 Withholding Requirements

 A directive issued by the Director of Income Tax in January 1993 requires all ministries, Government departments, public and semi-
public establishments and other taxpayers to withhold final payments to subcontractors until such entities present a tax clearance
certificate issued by the ITD. This directive also imposed annual disclosure and compliance requirements on the principal contractor

 Custom Duty

 The import of goods into Qatar is regulated by the Qatar Customs Law No. 5 of 1988.

 In general, a person wishing to import goods into Qatar for sale, must be registered in an importers register and be approved by the
Qatar Chamber of Commerce.

The following rates of customs duty apply:     

General items                                            4%   

Cement                                                    20%    
Steel                                                        20%    
Urea                                                        30%    
Records and musical instruments          15%     
Tobacco                                                100%
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Goods manufactured In GCC countries are exempt from customs duty provided they are accompanied by a certificate of origin Issued by The
Chamber of Commerce in the GCC state of' origin. Exemptions from customs duty apply to:

 Food products such as grains, livestock, tea, coffee, sugar, rice, infant milk and other essential consumer items;
 Equipment, materials and other supplies belonging to government entities or state companies;
 Personal effects and used household appliances and furniture belonging to foreign employees arriving in Qatar for the purpose of
residence.

 Tax Rates

 The following are the income tax rates:

 Qatari Riyals                       

 Tax Rate  

0 - 100,000                         Nil
100,001 - 500,000             10% 
500,001 - 1,000,000          15% 
1,000,001 - 1,500,000        20% 
1,500,001 - 2,500,000        25%
2,500,001 - 5,000,000        30%
5,000,001 and above          35% 

 Exchange Control

 No foreign exchange restrictions exist and equity capital, loan capital, and all income streams arising in Qatar are freely remittable.
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 Agencies and Trading

 Foreigners, whether natural juristic, are not allowed to engage in commercial agency business. Foreign trading organizations are not
permitted to operate on their own behalf in Qatar. They must sell their goods to Qatari concerns which will then market them locally.

 Valuation

 The basic value for the assessment of duty is the CIF value of the goods. Where only the FOB price can be established, duty is based
upon the FOB price plus I5%.

 Temporary ImportsThe Qatar Customs authorities allow certain goods, including equipment, to be imported on a temporary basis,
Temporary imports are subject to the prior approval of the Director of Customs.

 This approval is normally valid for a period of 6 months, but may be extended by a further 6 months.

 A longer "temporary Import" period may be granted in exceptional cases at the option of the customs authorities. A cheque or a bank
guarantee equivalent to the duty on a normal import must be deposited with customs to secure this temporary import arrangement.

 Duty ExemptionsAs general rule duty exemptions will not normally be granted. However, it is stated government policy to allow
customs duty exemptions for Qatari joint venture entities, where there is a substantial investment from the foreign joint venture party.

 Patents

 Patents are protected by a system of registration for an initial period of 10 years; they may be registered for a further five years only, It
is possible for patents to be licensed.

 Trademarks A trademark may be registered for 10 years and may be renewed indefinitely for further 10-year periods.

 Registration gives an owner the exclusive right to use a trademark on the goods for which the trademark is registered. The owner may
prevent other parties from using the trademark on competing products.
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 Copyright Under the 1995 intellectual properly original literary and artistic works, including computer software, video and audio tapes
are protected.

 The law includes penalties for violation including fines ranging from QR 30.000 to QR 100,000 and a term of imprisonment ranging from
six months to one year.   

 Qatar's strength is derived from its oil and gas revenues which have made it one of the wealthiest countries in the world in terms of
per capita income. The Government of Qatar has ownership interests in several economic sectors, including oil and gases
production, petrochemicals, and the steel and fertilizer industries. Government policy in recent years has recognized the need to
promote greater private investment in core industrial projects.

 Foreign Ownership of Business and Incentives

 Generally, a non-Qatari national, whether natural or juristic, may engage in commercial activities provided the foreign participation in
the entity does not exceed 49%. In October 2000, the Government enacted a new Foreign Investment Law aimed at promoting foreign
investment in specific business sectors including agriculture, manufacturing, health, education, tourism power and projects which
develop and utilize the State's natural resources.

 The new law permits up to 100% foreign ownership in these business sectors.

 The law does not allow a non-Qatari to participate in banking, insurance, commercial agency or real estate trading activities. 

The Government welcomes foreign investors and is keen to promote projects involving the transfer of foreign expertise and technology to
the Qatari economy. The enactment of the new Foreign Investment Law confirms the Government's commitment to attracting new
investors to participate in the future development of business in the State. In addition to expanding the zone within which foreign investors
can participate in the national economy and avail of 100% ownership in certain fields of the economy, the new Foreign Investment Law
confers upon foreign investors privileges, which were not available to them previously, including:

 The right to lease land for the project for up to 10 years.

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 The right to import the machinery, equipment and some of the primary materials required for the project.
 The exemption of the capital to be invested in the project from income tax for a period not exceeding 10 years.
 Exemption from import customs duties on the equipment and machinery to be imported for the project.
 Exemption from import customs duties on the primary raw materials and half-manufactured materials, which are not available in
Qatar.
 Protection from confiscation by the state otherwise than for the public welfare, without discrimination and subject to fare and
adequate compensation.
 The freedom to repatriate the profits of the project and its capital on liquidation; and the freedom to transfer the ownership in the
project.

Qatar, the Tax Cutter

Our annual country-by-country survey of tax burdens has produced a new low-tax winner: Qatar. The Persian Gulf state is planning a big
reduction in its only significant levy, on corporate income. That leapfrogs Qatar above nearby Dubai as an enticing spot for entrepreneurial
wealth creation. Both will now best longtime low-tax champion Hong Kong--despite that territory's tax reductions in its latest budget.

The Forbes Misery & Reform Index sums up the top rates faced by a successful entrepreneur not enjoying special tax favors. We think it is the
most relevant among several useful ways of analyzing an investing climate. The 2008 index highlights the stable taxes of Asia while noting the
flat tax revolutions of central Europe, the Balkans and Russia.
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THANK YOU