Qatar is engaged in a sustained process of tax reform, aligning its tax framework with international standards while maintaining its attractiveness as a strategic investment destination. Implementing new regulations, such as the Transfer Pricing documentation obligation, the adoption of the Domestic Minimum Top-up Tax (DMTT), and the future incorporation of the Value Added Tax (VAT), reinforce the country’s commitment to transparency and regulatory efficiency.
Current Tax Framework
Corporate income tax (CIT) in Qatar applies at a general rate of 10% for wholly or partially foreign-owned entities, calculated on the proportion of profits attributable to the foreign partner. Companies in the hydrocarbon and petrochemical sector are subject to higher rates, with a minimum of 35%, according to their current contracts.
Operating entities must register on the Dhareeba electronic tax platform and obtain a tax card within 60 days of their commercial registration. Companies operating under the jurisdiction of the Qatar Financial Centre (QFC) are subject to a 10% tax rate on profits sourced locally, with exemptions for qualified activities and non-regulated companies with at least a 90% Qatari shareholding.
The legislation also provides for tax exemption for companies under special investment laws, although they maintain reporting and withholding obligations. Entities established in free trade zones also enjoy tax exemptions, although they must strictly operate within the scope of their license.
Alignment with the Global Framework: Minimum Top-up Tax and Transfer Pricing
With Law No. 22 of 2024, Qatar adopted pillar two of the OECD’s global top-up taxation framework, establishing a 15% minimum top-up tax for large multinational groups through the DMTT and the Income Inclusion Rule (IIR), effective January 2025.
Additionally, the Transfer Pricing regulations require companies with international operations to file specific returns, along with the master and local files, within 60 days from the due date of the CIT return. Groups with revenues exceeding QR 3 thousand million are subject to country-by-country (CbCR) reporting. The QFC applies the Transfer Pricing rules but does not require documentation.
Indirect Taxes and Other Obligations
VAT is expected to be introduced in 2026, according to the GCC Unified Agreement, at a standard rate of 5%. Qatar also applies a selective tax on specific products, such as energy drinks, tobacco, alcohol, and pork products, with rates as high as 100%.
Withholding taxes do not apply to dividends, but they impose a 5% tax on interest payments, royalties, and technical services to non-residents, applicable even if the services are rendered outside Qatar. The QFC does not provide for withholding taxes.
Taxpayers must report contracts above certain thresholds (QR 200,000 for services and QR 500,000 for mixed agreements), as well as any contracts with non-residents, regardless of the amount. Failure to comply with these obligations may result in significant penalties.
Foreign Investment Incentives
The Qatari regulatory environment continues to actively promote foreign investment through benefits such as full repatriation of profits, sectoral tax exemptions, modern infrastructure, and legal certainty. The Foreign Capital Investment Law allows full foreign ownership in strategic sectors previously approved and potential establishments of 100% foreign-owned branches when contracting with state-owned entities.
Free trade zones and technology parks, such as the Qatar Science and Technology Park (QSTP), offer tax exemptions, freedom of capital movement, and operation without local intermediaries, provided that activities remain within the licensed framework.
Accounting and Compliance Regime
Entities must prepare financial statements under International Financial Reporting Standards (IFRS) in Arabic. The QFC accepts alternative international accounting principles and allows presentation in English. In addition, public companies, LLCs, holding companies, and limited partnerships are subject to mandatory auditing and rotation of the auditor every five years.
Exchange Control and Financial Supervision
Qatar imposes no restrictions on the flow of foreign exchange, allowing free movement of capital. The financial environment is regulated by the Qatar Central Bank (QCB) and the QFC Regulatory Authority, ensuring compliance with international standards of stability and prevention of money laundering.
Conclusion
Qatar’s tax system has evolved to a more complex structure aligned with global standards, without compromising its ability to attract investment. Implementing Transfer Pricing rules, adopting a global minimum tax, and the future entry into force of VAT reflect a clear focus on tax transparency, competitiveness, and economic sustainability. In this context, companies operating in Qatar must strengthen their tax compliance strategies and proactively adapt to the new regulatory environment.
Source: Oxford Business Group