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Qatar: Tax authority guidance, new income tax law provisions

Qatar: Tax authority guidance, new income tax law

There is a new income tax law (No. 24 of 2018) in Qatar that is generally effective 13 December 2018.

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The tax authority issued a circular (No. 14 of 2019) to clarify application of the new income tax law provisions including:
 

  • Withholding tax rates: There is a unified withholding tax rate of 5% in the new income tax law. This rate will apply to contracts concluded on or after 13 December 2018. However, if the contracts were entered into prior to 13 December 2018, the withholding tax rates will apply as follows:
    • In the case of payments due before 13 December 2018, the withholding tax rates provided in the old income tax law (No. 21 of 2009) will apply even when the date of actual payment is after 13 December 2018.
    • In the case of payments due after 13 December 2018, the unified withholding tax rate of 5% under the new law will apply.

  • Effective date: Provisions under the new income tax law generally will apply to the accounting periods beginning on or after 13 December 2018. Income from petrochemical operations will be taxed at a rate of 35% for the accounting period beginning on or after 13 December 2018.

  • Computation of penalties: With regard to the calculation of penalties and surcharges for overlapping violations (i.e., violations that began before the new income tax law and continued after its enactment), the effective date of the penalty provisions under the new law is 17 February 2019.

  • Arabic language requirements: Taxpayers must use Arabic in their correspondence and clarifications submitted to the tax authority, effective from 13 July 2019. With regard to financial statements of taxpayers, the requirement to use Arabic will apply with respect to the tax year beginning on or after 1 January 2020, unless the tax authority grants an extension.
    • Taxpayers and auditors must submit all correspondence to the tax authority by registered letter until the electronics correspondence mechanism is activated.  


Read an April 2019 report [PDF 118 KB] prepared by the KPMG member firm in Qatar

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