There is no tax on personal per capita income. This means that employees take home their wages and salaries without any tax deducted.
However, an individual who exercises any type of commercial activity with the intention of gaining income is required to pay tax according to the Companies Tax law (see Company Taxation below).
The total income of Qatari and GCC nationals resident in Qatar is exempted from paying tax. Resident is defined as anyone who owns a permanent accommodation in the State of Qatar, or stayed in for more than 183 days continuously or intermittently during (12) months, or his vital interests are linked to Qatar.
The rate of tax is 10% of a company’s Total State Income, paid annually. This fixed rate is only applicable on businesses and not on individuals’ incomes (see Personal Tax above). Typical business costs are deductible and losses can be rolled over for a period no longer than 3 years from the original accounting declaration.
“Commercial Activity” means any profession, vocation, service, trade, industry, speculation, contractual work or any profit & income making business. Rental income is subject also to a fixed tax rate of 10 %.
More in-depth information can be found in the Law No.24 of 2018 on Tax Income.
How is Company Tax calculated?
A company (or individual) is required to pay tax on income that has been generated in from sources in the State during the previous tax year. This Total State Income includes:
- Operating any commercial activity within the State.
- Contracts being executed totally or partially within the State
- Properties in the State; including income from selling stocks, company shares, and individual companies that own real estate assets within State.
- Services provided by the main company, branches and other related firms
- Income on loans provided by the State.
Total State Income, which results through the exploiting, exploration or production of the State’s natural resources, may be subject to additional taxation under the Double Tax Agreement signed in the Country of registered origin of the company. Qatar has favourable Double Taxation Agreements with over 40 countries.
For more information, you can check Qatar Financial Centre’s (QFC) Fact Sheet.
Tax exemptions apply to the following:
- Profits and revenues on Public Treasury Bonds, Development Bonds and Public Corporation Bonds.
- Dividends and other income from shares that comply with conditions set out in Law No.24 of 2018 on Tax Income.
- Small handcraft businesses )three employees or less).
- Income of companies working in agriculture, fisheries, aerial and maritime transportation, on condition of reciprocity.
- Qatari legal persons residing in the State.
Tax on Capital Gains
Capital gains on the disposal of real estate and/or securities derived by an individual are exempt from Capital Gains Tax provided the asset is not part of a taxable activity (i.e. a business).
There are no more taxes as Qatar is one of a number of low taxation countries around the world, which makes it attractive to expats (individuals and companies).
You can check QFC Tax website for more information.