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Qatar: Possible considerations, VAT and the retail sector

Qatar: VAT and the retail sector

Under the Gulf Cooperation Council’s framework, Qatar is expected to introduce a value added tax (VAT) regime in 2019, with the standard VAT rate to be 5%.


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All businesses in Qatar would be affected by the introduction of a VAT regime; however, the retail sector could be even more affected. A number of factors of a VAT system that need to be considered with respect to a retailer’s operations in Qatar concern:

  • Shelf prices (i.e., the advertised shelf price of an item would need to include VAT so that customers would be aware of the total price)
  • Simplified invoices (retailers would have to issue tax invoices to their customers on sales of taxable goods)
  • Consignment sales (under a consignment agreement, a retail business is able to return any unsold goods to the initial supplier without having to account for VAT)
  • Returning goods (i.e., customers returning items to a retailer or in instances when goods are damaged or lost during delivery; the retailer is able to adjust the original value of the supply so that input VAT would only be recovered for the complete or undamaged items returned)
  • Product bundling (i.e., the correct treatment for supplies sold within the same transaction but individually would be subject to different VAT rates)
  • Payments using loyalty cards—the tax treatment can be complex when using “loyalty points” to pay, or partially pay, for an item because no monetary payment or partial payment is made.
  • Gifts and samples (VAT would be applied at a standard rate when businesses supply free gifts or samples of significant value)
  • Gift vouchers (whether VAT would be applied on the voucher sale date, or the redemption date to provide for consistent VAT treatment)
  • Sale of second-hand goods (output VAT on the difference between the price paid for the item and the price for which the item is sold) 
  • VAT refunds for tourists (tourists permitted to recover VAT paid when purchasing goods outside of their home country)


Read an October 2018 report [PDF 1 MB] prepared by the KPMG member firm in Qatar

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