Qatar's Income Tax Law defines a "resident" as every individual who has a permanent home available to them in the state, or who has stayed in the state continuously or intermittently for more than 183 days in a year, or who holds Qatari nationality, and every entity whose place of incorporation is in the state, provided that the principal and actual place of its management is also there. A "permanent establishment" is a fixed place of business through which a project carries out its business wholly or partly, and it includes special cases such as a construction site lasting more than 6 months, or the provision of services for a period exceeding 183 days within 12 months.
Who Is a Resident of Qatar for Tax Purposes?
The law provides that a resident is every individual who has a permanent home available to them in the state, or who has stayed in the state continuously or intermittently for more than 183 days in a year, or who holds Qatari nationality. As for entities, an entity is considered resident if its place of incorporation is in the state, provided that the principal and actual place of its management and control is also there; incorporation in the state alone is not sufficient if actual management takes place abroad.
The Definition of a Permanent Establishment
The law defines a permanent establishment as a fixed place of business through which a project carries out its business wholly or partly. The executive regulations elaborate on this concept by giving examples, including an office, a factory, a workshop, a sales outlet, and a warehouse, in addition to a mine, an oil or gas well, a quarry, or any other place for the exploration, extraction, or exploitation of natural resources.
Construction Sites: a Permanent Establishment After 6 Months
The executive regulations provide that the term permanent establishment also includes a construction site, or an assembly or installation project, or related supervisory activities, provided that the site, project, or activities continue for more than 6 months. If the construction site does not exceed this period, it is not considered a permanent establishment of the foreign project carrying it out.
Provision of Services: a Permanent Establishment After 183 Days
The concept of a permanent establishment also covers the provision of services, including consultancy services, by a project through employees or other personnel it engages for this purpose, provided that these activities continue inside the state for a period or periods totalling more than 183 days within any 12-month period commencing or ending in the relevant fiscal year.
Cases Not Considered a Permanent Establishment
The term permanent establishment does not include the use of facilities solely for storing or displaying goods owned by the project, nor maintaining a stock of such goods for storage, display, or processing by another project, nor maintaining a fixed place of business solely for purchasing or gathering information, provided that such activity is of a preparatory or auxiliary character and does not form the core of the project's business.
Legal References
- Law No. (24) of 2018 Promulgating the Income Tax Law — Article 1 (Definition of Resident)
- Law No. (24) of 2018 Promulgating the Income Tax Law — Article 1 (Definition of Permanent Establishment)
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 1/1
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 1/2/a
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 1/2/b
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 1/3
For questions about your specific situation, you can ask the Qatar Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.