Qatar is a rich country with a modern well developed infrastructure and one of the strongest economies of the region. Due to its significant oil and gas reserves, Qatar has one of the world’s highest incomes per capita. Experts consider the country “an ideal place for life” with the highest score for its tax regime. Companies of Qatar, including those with foreign participation, must keep accounting records and financial statements based on compliance with international accounting standards.
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According to the general rule, tax period coincides with calendar year, and a taxpayer must annually report on that period, unless a relevant permission has been received to change the financial year (in exceptional cases).
The first financial period (coincides with tax period) may be more or less than 12 months, but must not be less than 6 months or more than 18 months after the date of the company’s incorporation.
According to provisions of Law No. 11 of 2015 Promulgating the Commercial Companies Law, companies incorporated in Qatar must prepare their financial statements in accordance with the International Financial Reporting Standards (IFRS).
Financial statements of a company shall include the following documents:
All books of accounts, registers and source documents related to the company’s activity must be kept in Qatar for 10 years.
The Commercial Companies Law requires public joint-stock companies to provide the Ministry of Commerce and Industry with financial statements in accordance with IFRS.
Public companies must also publish financial statements 15 days before their annual general meeting in two local newspapers (in Arabic and English) and on their websites.
A tax return and supporting audited financial statements must be in Qatari riyals (QAR).
Normally, all companies must file tax returns within 4 months after the end of the reporting period. The deadline may be extended at the discretion of the General Tax Authority (GTA), but the extension period may not exceed 4 months. An extension application must be filed up to 30 days before the initial deadline.
Companies fully owned by residents of Qatar or other citizens of countries of the Persian Gulf are exempt from corporate income tax but must file tax returns and audited financial statements with tax authorities if their capital is QAR 2 000 000 or more or if their annual income is QAR 10 000 000 or more.
The special economic zone Qatar Finance Center (QFC) has a different deadline for filing a tax return and paying tax, which is the end of the sixth month after the end of the company’s financial year. There is an online system for filing tax returns exclusively for entities incorporated in QFC.
A tax return must be enclosed with audited financial statements, if the company’s capital or profit exceeds QAR 100 000 (~ USD 27 500) or its head office is outside Qatar. A tax return must be certified by a practicing accountant in Qatar registered with the Ministry of Finance.
In the case of a delay in filing a tax return, the law provides for a QAR 500 penalty for each day of delay. The maximum amount accrued may not exceed QAR 180 000.
In the case of late payment of tax, the law provides for a penalty of 2% of the unpaid amount, which accrues monthly after the beginning of the delay. The maximum amount of the penalty is 100% of the amount of unpaid tax.
QFC applies the following penalties:
QFC charges a 5% annual interest on the amount of unpaid tax.
Consolidated financial statements shall be made for a group of companies if the parent company holds a majority of shares in the authorized capital of the subsidiary, influences its financial and operating activity or exerts significant influence when making transactions.