Ministry of Economy and
Finance
Public Revenues and Taxes
Department
Main features of the new
Income Tax Law
December 2009
Introduction
Law No. 21 of 2009 issuing the Income Tax
Law (ITL) was issued on 17/11/2009
Entry into force of the ITL: The ITL will apply
on income arising on or after 01/01/2010 (to
be declared during 2011).
Some provisions will apply, however, as of
01/01/2010
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Scope
Territorial scope
Income from sources in Qatar
Certain bank interest and returns
realized outside Qatar
Commissions accrued outside Qatar in
respect of activities carried on in
Qatar
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Scope (cont.)
Income from sources in Qatar
Income from an activity carried on in Qatar
Income from contracts wholly or partly carried
on in Qatar
Income from property situated in Qatar
Consideration for services paid to head
offices, branches or related companies
Interest on loans derived from Qatar
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Exemptions
Certain bank interest and returns
Interest of public treasury bonds, development
bonds and public corporation bonds
Interest paid to individuals not carrying on a
taxable activity
Dividends
Capital gains on real estate and securities
(subject to conditions)
Handcraft activities (subject to conditions)
Income from agriculture and fishery
Income of Qataris and companies wholly
owned by Qataris who are residents in Qatar.
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Calculation of tax
Accounting rules: accounting period, accounting and
taxation
Tax base
Taxable income: Gross income – deductions
General conditions of deduction
Examples of allowable deductions, including (realized)
bad debts and provisions
Prohibited deductions
Losses
Tax rates
Standard rate: 10%
Special rates: rates of agreements or 35%
Withholding tax rates: 5% or 7%
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Calculation of tax (cont.)
Withholding tax (WHT)
What is subject to WHT? amounts paid to
non residents and not related to a
permanent establishment (PE)
At which rate?
5% on royalties and technical fees
7% on interest on loans, commissions,
brokerage fees, director’s fees, attendance fees
and other payments for services performed
wholly or partly in Qatar
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Calculation of tax (cont.)
How the WHT is carried out?
Retention of the WHT amount
Delivery of a WHT certificate to the recipient
stating the gross amount paid and the WHT
amount
Payment of the WHT to the tax department within
15 days from the end of the month of payment
In case of non compliance: The payer of the
amounts shall pay the WHT + a penalty equal
to the amount of WHT
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Calculation of tax (cont.)
Impact of Double Taxation Agreements
(DTAs) on WHT
Application of treaty rates only upon presentation
of a tax residence certificate from the competent
authority of the State of residence
Treaty rates better (less) than rates provided for in
the law: treaty rates apply
Treaty rates higher than rates provided for in the
law: law rates apply
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Calculation of tax (cont.)
Effective date of the WHT
01/01/2010
Application of the penalty: The
Director has the authority to reduce
its amount of up to QAR 50,000
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Taxpayer’s obligations
Information of the Department of the
beginning and the end of the activities
Filing tax returns
Bookkeeping requirements
Withholding tax
Disclosure of information
Spontaneous
Upon request
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Powers and duties of the Tax
Department
Access to the taxpayer’s premises and data
Assessment of the tax
Powers of the Department during the assessment
Cases of presumptive assessment
Assessment decision
Re-assessment
Application of the assessment procedure against the
liquidator
Secrecy requirements
Case of information protected by bank secrecy
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Powers and duties of the Tax
Department (cont.)
Collection
Payment upon filing of the return and at the end of
the objection phase
Settlement of the tax liability upon the rendering of a
final court decision
Seizure procedures (provisional and executive)
Refund
Possibility of appeal against the decision of the
Department re a refund claim
Possibility of compensation of the taxpayer in case of
delay in making the refund
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Objections and appeals
Objection
Period of objection: 30 days
Consequences: suspension of the execution of
the assessment decision
Appeals
Before the Tax Appeal Committee
Before the competent court(s)
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Offences and penalties
Administrative penalties
Late filing and late payment of the tax
Failure to comply with certain obligations
Penalties for tax crimes
Against the taxpayer and whoever
motivates or assists him to commit a
crime
Against Department’s employees
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General provisions
Anti-avoidance
Definition
Prerogatives of the Department
Statute of limitation periods
Case where a return is filed
Case where a return is not filed
Case where the taxpayer is not registered
Statute of limitation re collection
Causes of interruption
Income and entities not taxable
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Conclusion: What’s new?
Registration and tax cards
Withholding tax
Some rules re determination of taxable
income
Tax rates
Penalties
Anti-avoidance
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THANK YOU!
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