Qatar's Income Tax Law exempts the gross income of resident legal persons wholly owned by Qataris, and it also exempts the profit shares of resident legal persons in proportion to the shares held in them by Qataris, whether ownership is full or partial, with an express exception for state-owned companies operating in petroleum operations and petrochemical industries. The same exemptions extend, under the executive regulations, to nationals of the Gulf Cooperation Council states.
Exemption for Legal Persons Wholly Owned by Qataris
The law exempts the gross income of resident legal persons in the state that are wholly owned by Qataris. The executive regulations require, for this exemption to be granted, that the legal person be resident in the state, that it keep accounting books consistent with the accounting standards applied in the state, that the Qataris be resident in the state and be the beneficial owners of the legal person, and that they own the entire capital throughout the accounting period in which the exempt income is realized.
Proportional Exemption for Partial Ownership
The law also exempts the profits of resident legal persons in the state in proportion to the profit shares of Qatari natural persons, legal persons wholly owned by Qataris, and legal persons partially owned by Qataris, in proportion to their profit shares therein. Where Qatari ownership in a resident company is less than 100%, the exemption is limited to the proportion corresponding to that ownership, while the profit share of non-Qatari partners remains subject to tax.
Exception for State-Owned Petroleum and Petrochemical Companies
The partial-ownership exemption does not apply to the profit shares of legal persons owned by the state, wholly or partially, directly or indirectly, and operating in petroleum operations and petrochemical industries; these shares remain subject to the special tax treatment applicable to that sector.
Equal Treatment for GCC Nationals
The executive regulations provide that the same exemptions granted to Qatari nationals apply to nationals of the Gulf Cooperation Council states, in accordance with the controls set for Qatari nationals under the law, and under Law No. (9) of 1989 on the equal tax treatment of nationals of the Gulf Cooperation Council states.
Non-Resident Qatari- or GCC-Owned Companies: Withholding Still Applies
Qatari or GCC ownership of a company does not necessarily mean the company itself is exempt from every tax obligation if the company is not resident in the state; the executive regulations provide that withholding at source, at the rate and under the controls prescribed, applies to amounts paid to non-resident companies wholly or partially owned by Qatari nationals and nationals of the Gulf Cooperation Council states. The test for the exemption is therefore the residence of the legal person in the state, not the nationality of its owners alone.
Legal References
- Law No. (24) of 2018 Promulgating the Income Tax Law — Article 4/13
- Law No. (24) of 2018 Promulgating the Income Tax Law — Article 4/14
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 2/10
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 2/14
- Cabinet Decision No. (39) Issuing the Executive Regulations of the Income Tax Law promulgated by Law No. (24) of 2018 — Article 22/3
For questions about your specific situation, you can ask the Qatar Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.