Posted on January 27, 2020

The changes introduced in the new Qatar Executive Regulations of the new Income Tax Law, are expected to have a significant impact on Qatari businesses and taxpayers, including updates to the withholding tax regime and the introduction of transfer pricing, according to EY.

To discuss the latest developments to the OECD Base Erosion Profit Shifting (BEPS) initiatives, tax digitalization, VAT, the latest Qatar economic outlook and the country’s budget for 2020 along with the changes in the local business landscape, EY recently organized a tax seminar in Doha that was attended by more than 180 tax and accounting professionals from entities across Qatar.

Discussing the changes at the EY tax seminar, Ahmed Eldessouky, Partner, Business Tax Services, EY, said: “The new regulations introduced many changes, both computational and administrative provisions, which would impact the way taxpayers deal with their tax obligations. The new withholding tax (WHT) articles in the Executive Regulations apply a “Consumption Test” whereby it is expected to capture a wider array of services and will affect businesses both from a tax compliance and commercial perspective.”

A notable benefit from changes in the Executive Regulations, include carried forward losses “Companies can now carry forward losses for up to five years in a tax period where such losses have been realized, where previously there was a three-year threshold. The new arrangement is more valuable to the taxpayer from a tax planning standpoint,” further added, Ahmed.

Qatar’s budget for 2020

The EY experts also discussed Qatar’s 2020 budget during the seminar and the Government’s emphasis on the establishment of infrastructure and facilities in free zones, special economic zones, industrial and logistic zones and the development of new housing areas for nationals.

Impact of BEPs

According to Marcel Kerkvliet, EY International Tax and Transactions Services Partner: “For BEPS 2.0 project developments, particularly BEPS Pillars 1 and 2, companies should, amongst other actions, monitor the OECD developments, understand perspective of countries that are relevant to business footprints and communicate with management stakeholders.”

VAT laws and regulations

While VAT laws and regulations have not been published, there is sufficient guidance in the GCC VAT framework agreement and the laws of other GCC States to enable businesses to start their VAT readiness project. Based on experience, most companies need at least six months to be ready.

Transfer pricing and international tax developments

According to EY, the revenue or asset threshold is not yet established, therefore, entities should start revisiting their TP arrangements and consider preparing for the possibility of submitting the required local TP documentation and compliance by end of April 2020. Failure to comply with the new TP rules may result in the imposition of penalties in accordance the Income Tax Law.


The seminar also touched on the topic of tax digitalization where tax authorities in the GCC, including Qatar, are moving towards digitalization at rapid pace – a strong incentive for businesses to keep up with that pace, if not faster, to maximize such opportunities.