Posted on December 15, 2018

A set of taxation laws were issued including Law number (24) of 2018 on the Income Tax, Law number (25) of 2018 on the Selective Tax. Also, a decision was issued to establish the General Tax Authority (GTA).

The new tax laws are part of the process of developing Qatar’s financial system to keep up with international best practices and enhance economic growth and financial stability, due to the importance of the taxation system in financial policies in most countries around the world. The General Tax Authority has been established as a separate entity, under the supervision of the Ministry of Finance, and will be in charge of the implementation of all tax laws.

The GTA mandate includes, the implementation of all tax laws and setting up all related bylaws, procedures and instructions. Reviewing and assessing tax return forms submitted by all establishments and the collection of taxes from subject entities. Representing the State of Qatar in relevant international and regional organizations as well as at international conferences and events. Signing agreements with other countries regarding the prevention of double taxation to encourage economic cooperation and joint investments.

The Income Tax law of 2018 amends previous income tax laws. The income tax on foreign companies working in Qatar or on the stake of foreign partners in joint ventures remained at the same level, which is a 10 percent flat rate on profits. The amendments focused on reforming administrative and procedural systems, supporting tax compliance by taxpayers and granting greater flexibility in granting tax exemptions to institutional activities in key economic sectors and economic zones to support growth and economic diversification, thereby encouraging and attracting foreign investment.

The law stipulates that the salaries and wages of citizens and residents shall not be subject to any tax. It also grants exemptions for equity shares listed on a recognised stock exchange profits of banking deposits and companies working in the agricultural sector and fisheries. Marine and aerial transportation are also exempted under the principal of reciprocity. The Selective Tax law is designed to impose taxes on certain health-damaging goods and it will be implemented by the beginning of 2019. The law includes a 100 percent tax on tobacco and its products and energy drinks, and a 50 percent tax on sugary drinks.