In September 2020, Qatar’s General Tax Authority (GTA) introduced a new online tax portal, Dhareeba. The portal follows a holistic approach for filing income tax returns and various other declarations and reports electronically.
One of the key pre-requisites to submit an income tax return on Dhareeba is filing a declaration of related-party transactions under the ‘Statement of Transfer Pricing’ (TP Declaration), where applicable (in addition to the income tax return).
The GTA has verbally confirmed that the TP Declaration must be filed in cases where the taxpayer has “Total Value of Assets” OR “Total Revenue” exceeding the thresholds determined by the GTA (expected to be QAR 10 million).
Accordingly, we recommend taxpayers be prepared to provide the information required for the TP Declaration in order to avoid risk of non-compliance. The Dhareeba system is already equipped to accept the TP Declarations, and the taxpayer is responsible for providing the required information.
Amongst other transactional information pertaining to the related-party transactions, the TP Declaration requires the taxpayer to state the OECD method, based on which the taxpayer has determined whether the transactions meet the arm’s length standard.
It is therefore important for taxpayers to determine whether they have entered into any related-party transactions and if the answer is in affirmative, whether the transaction is entered at an arm’s length price (ALP), in compliance with TP provisions.
It is pertinent to note that if the transactions are not at arm’s length, this may impact taxable profits and the taxpayer would need to make a corresponding TP adjustment in the tax return.
How can KPMG assist?
The related-party transactions to be reported while filing income tax returns on Dhareeba need to be reviewed. KPMG can assist in:
- understanding the nature and class of related-party transactions
- defining the method for determination of ALP and availability, coverage and reliability of data necessary for application of the method
- identifying the degree of comparability existing between the related-party transactions and the independent third-party transactions
- providing a basis/opinion for adjustments which can be made to account for differences, if any, between the related-party transactions and the comparable uncontrolled transaction
- assisting in preparing a limited scope analysis that can act as a first level of defense in case of a tax audit
If you have any questions or would like to discuss this further, please contact us.