If you’re thinking of living and working in Qatar, it’s essential to understand the country’s tax system – as it’s likely to be pretty different from what you’re used to.
If you’re moving to Qatar, you’ll probably want to know how much tax you’ll be paying in your new home. The good news is that, unlike in many other countries, there’s no federal income tax to pay in Qatar. Understandably, many expats will find it appealing.
However, that’s not to say you won’t have to pay any tax at all. In fact, there are several other taxes you might need to pay while living in Qatar, from withholding tax to capital gains tax. To help you understand what you’ll need to pay, this article details the tax situation for individuals and companies in Qatar. It includes information on the following:
- The tax system in Qatar
- Federal taxes in Qatar
- Taxes on goods and services (VAT) in Qatar
- Qatar tax system for foreigners
- Tax on property and wealth in Qatar
- Inheritance tax in Qatar
- Company taxes and VAT rates in Qatar
- Import and export taxes in Qatar
- Tax advice in Qatar
- Useful resources
The tax system in Qatar
Generally speaking, there are relatively few taxes to pay in Qatar when compared to other countries. Indeed, there is no income tax on personal income, no inheritance tax, and no property taxes. In addition to this, there is currently not Value Added Tax (VAT) to pay, either. However, local authorities have announced plans to introduce VAT at some point in 2022.
That said, certain products that are deemed to be harmful by the Qatari authorities – including tobacco and most carbonated drinks – are liable for excise taxes, and therefore more expensive.
Depending on your individual situation, you might also have to pay withholding tax and corporate tax if you run a foreign-owned business that derives income from Qatari sources.
Federal taxes in Qatar
Qatar does not levy income tax on individuals’ salaries, wages, or allowances. This is regardless of whether you’re an expat or a Qatari national.
However, anyone who engages in commercial activity for profit will have to pay tax. This includes self-employed workers in Qatar. As the money you earn won’t be paid through an employer, but rather from your own business, you’ll be taxed in the same way as other businesses. Whether or not you’ll have to pay depends on whether the money you make is from a qualifying income source within Qatar.
If any self-employed income does come within the scope of Qatari corporate tax, you’ll pay at a rate of 10%. As Qatar has a territorial tax system, you’ll need to pay the tax regardless of whether you’re a Qatari tax resident or not.
You’re considered a tax resident if the following applies: you have a permanent home in the state of Qatar, you have been in Qatar for more than 183 days in a 12-month period, or the center of your ‘vital interests’ are linked to Qatar. Vital interests could include Qatar being where someone’s close family lives, for instance.
Due to Qatar’s small population and high GDP, individuals don’t have to pay any social security taxes. However, employers must pay social insurance for Qatari employees.
Qatari nationals automatically qualify for state-provided medical care, pensions, maternity pay, childcare, and unemployment benefits.
The same does not apply to expats. Foreigners can access medical assistance, but don’t qualify for other state benefits. For this reason, it’s sensible to invest in things like health insurance so you can access private healthcare.
Not all companies have to pay corporate tax in Qatar.
Companies wholly owned by Qatari or Gulf Cooperation Council (GCC) nationals are not liable for corporate income tax (CIT). The GCC includes Qatar, United Arab Emirates, Saudi Arabia, Kuwait, Oman, and Bahrain.
However, companies that are wholly or partly foreign-owned and have income sources in Qatar will be liable for CIT in Qatar. CIT is usually a flat rate of 10%, but companies with oil and gas operations may pay 35%.
Employers must also pay social insurance for any employees that are Qatari nationals, equal to 10% of the employee’s salary.
If you’re thinking about investing in Qatar as an expat, the good news is you’re unlikely to pay tax on investment growth.
According to Deloitte, there is also no dividend tax to pay, if the income received is from profits that have already been subject to Qatari tax, or they’re from a company that’s exempt from tax in Qatar. Dividends from company shares are tax-free, and you don’t pay withholding tax on dividend income either.
Foreign companies that later sell shares in Qatar-based companies may be subject to tax in Qatar – a rate of 10% is likely to be charged on certain capital gains.
Capital gains tax
Individuals that make capital gains from the sale of property and securities usually won’t have to pay any tax on them.
However, if gains are earned by non-Qatari residents as a result of selling assets that are considered to be Qatar-sourced – such as property in Qatar, for example – they’ll pay 10% capital gains tax.
If you do have to pay tax on your gains, you need to file a capital gains tax return. You must file a return within 30 days of the sale, or within 30 days of when the contract concludes, whichever is sooner.
Qatar has more than 80 double taxation agreements in place with countries around the world. These countries include Austria, France, Hong Kong, and the United Kingdom, among many more. This prevents expats from having to pay tax twice on the same income, therefore encouraging more foreign investment.
For more information and a full list of these countries, visit the Qatar Financial Centre website.
There are no property taxes to pay in Qatar. However, the government may charge fees when you register a property you’ve purchased. This transfer fee is usually 0.25% of the property value, paid by the buyer – there aren’t any selling costs like stamp duty.
Landlords may also pay fees to the Real Estate Lease Contracts Office for registering leases. This is usually 0.5% of the annual rental value of the property, at a minimum of 250 QAR and a maximum of 2,500 QAR.
Note that expats can only buy properties in specific areas of Qatar, like The Pearl and West Bay Lagoon. However, once you do buy a property, you’ll get Qatari residence for as long as you own the property.
There are no inheritance, estate, or gift taxes in Qatar. This means you won’t need to worry about your heirs having to pay any taxes on the inheritance they receive, and there are no restrictions on what you can leave them.
However, it’s still a good idea to have a will in place. If you don’t have an heir living in Qatar, Qatari law applies to any assets you own in the country.
This means that any property, benefits and financial rights are transferred to those who are entitled to inherit it. But, if you don’t have any beneficiaries that are deemed to have inheritance rights under Qatari law, your assets could be devolved to the state.
Those entitled to inherit an estate are listed in article 251 of the legislation Promulgating ‘The Family Law’.
Luxury and excise taxes
Qatar introduced an excise tax in 2019. The tax is only applicable on a small number of products deemed to be harmful or prohibited in accordance with the Islamic faith. These include:
- Tobacco products: (taxed at) 100%
- Carbonated drinks (excluding non-flavored carbonated water): 50%
- Energy drinks: 100%
- Special purpose goods: 100%.
Special purpose goods include things like alcohol and pork items.
Non-residents may have to pay a 5% withholding tax if they’ve made money from services originating in Qatar. This rate is the same for individuals, self-employed workers, and companies.
This could happen in instances where a non-resident has made interest from a Qatar-based investment, or if a non-resident is paid for services used in Qatar.
Withholding tax also applies to royalties, technical fees, commissions, and brokerage fees when they’re being paid to a non-resident.
You might not have to pay if you’re connected to a permanent establishment (PE) in Qatar since you’ll usually be issued with a tax card which will mean you don’t have to pay.
What’s more, the 5% flat rate can also vary if there’s a tax treaty in place with the country of your tax residency.
Taxes on goods and services (VAT) in Qatar
VAT is expected to be introduced in Qatar very soon, with draft legislation having been debated and discussed by authorities over the past couple of years.
VAT is likely to be introduced at 5%, before possibly being increased in the future.
Certain goods and services are likely to remain free of VAT or simply charged at 0%. In other GCC countries, medicines and medical products have 0% VAT, as do some goods and services used in education.
Qatar tax system for foreigners
Generally speaking, foreigners are more likely to pay tax than Qatari nationals. For example, if you own or part-own a business that earns money from any sources in Qatar (such as being based in Qatar) you’ll be charged corporation tax.
While personal income is not taxable in Qatar, depending on your individual circumstances you may still need to pay tax in your home country.
Qatar currently has more than 80 double taxation treaties in place, including the following countries:
Algeria, Austria, Barbados, Bulgaria, China, Croatia, Cyprus, France, Georgia, Greece, Hungary, India, Indonesia, Ireland, Italy, Japan, Jordan, Kenya, Latvia, Luxembourg, Malaysia, Malta, Mauritius, Nepal, Netherlands, Nigeria, Pakistan, Poland, Portugal, Romania, Senegal, Serbia, Singapore, Spain, Turkey, United Kingdom, Vietnam, and Yemen.
The Qatar Financial Centre website has the full list.
Tax on property and wealth in Qatar
There are no property taxes or net wealth taxes to pay in Qatar. This is good news for the high net-worth individuals who live there.
However, property buyers and landlords usually have to pay registration fees when they purchase new properties and register new leases.
Inheritance tax in Qatar
There is no inheritance or estate tax in Qatar. However, if you die without leaving a will, your estate could be devolved to the state if your beneficiaries don’t have inheritance rights under Qatari law.
See the online legislation for more details on which beneficiaries are allowed to inherit an estate in Qatar.
Company taxes and VAT rates in Qatar
Qatari-owned businesses don’t usually need to pay any corporate tax – but if a business is partly or fully foreign-owned then corporation tax may be levied.
A company is considered to be Qatari if it is incorporated under Qatari law, its head office is in Qatar, or its effective place of management is in Qatar.
Companies that are wholly or partly foreign-owned and generate income from Qatari sources generally pay corporate tax at a flat rate of 10%.
Tax returns are usually due within four months from the end of a company’s accounting period. You must pay any tax owed on the same day the return is due.
Financial returns must be accompanied by audited financial statements if either the capital is more than QAR 200,000; the total income exceeds QAR 500,000, or the company is based outside of Qatar. You must submit your tax return in Arabic.
Companies with annual revenue of QAR 10 million or more must also submit tax returns and financial statements, even if they’re exempt from corporate tax.
Excise tax for businesses
Businesses involved in the import and export of excise goods must register with the General Tax Authority. The charges are as follows:
- Tobacco products: 100% tax charge
- Energy drinks: 100% tax charge
- Special purpose goods: 100% tax charge (including alcohol and pork products)
- Carbonated drinks: 50% tax charge (not including non-flavored aerated water).
VAT for businesses
While authorities currently have plans to introduce VAT in Qatar, it has not happened yet – so there’s nothing to pay for the time being.
It’s not yet clear which business will have to register for VAT in Qatar. Companies with turnovers below a certain threshold can often register voluntarily or gain an exemption in other countries.
Capital gains tax
Capital gains derived by a non-Qatari company are added to its other income and are taxed in the same way. In most cases, this is at a flat rate of 10%.
Import and export taxes in Qatar
Products imported within the GCC region aren’t liable for customs duties. A tax of 5% is levied on most products imported from outside of the region
In addition, some products have higher duties, including:
- Records and musical instruments: 15% tax
- Pork and pork products: 100% tax
- Tobacco and tobacco products: 100% tax
- Alcoholic beverages: 100% tax.
For more information, visit the General Authority of Customs.
Some goods are exempt from customs duties, including importation for military projects and importations of goods to be used by diplomatic bodies.
Tax advice in Qatar
As Qatar doesn’t charge income tax, those who only have employment earnings won’t need an accountant.
However, those who are self-employed or who run businesses in Qatar may want to seek independent financial advice on their business tax liabilities to make sure they’re paying the right amount of tax.