Qatar is undergoing a sustained process of fiscal transformation, aligning its tax framework with international standards without losing its appeal as a strategic investment destination. The implementation of new regulations, such as transfer pricing documentation requirements, the adoption of the domestic market tax (DMTT) and the future introduction of value added tax (VAT), reinforce the country’s commitment to transparency and regulatory efficiency.
Current Tax Framework
Corporate income tax (CIT) in Qatar is levied at a general rate of 10% for wholly or partly foreign-owned entities, calculated on the proportion of profits attributable to the foreign partner. Companies in the hydrocarbon and petrochemical sectors are subject to higher rates, with a minimum of 35%, in accordance with their existing contracts.
Operating entities must register on the Dhareeba electronic tax platform and obtain a tax card within 60 days of their commercial registration. Companies under the jurisdiction of the Qatar Financial Centre (QFC) are treated separately, also with a tax rate of 10% on local source profits, except for exemptions for qualified activities and unregulated companies with at least 90% Qatari ownership.
The legislation also provides for tax exemption for companies under special investment laws, although they remain subject to filing and withholding obligations. Entities established in free zones also enjoy tax exemptions, although they must operate strictly within the scope of their license.
Alignment with the Global Framework: Minimum Tax and Transfer Pricing
With Law No. 22 of 2024, Qatar adopted pillar two of the OECD’s global minimum taxation framework, establishing a minimum tax of 15% for large multinational groups through the DMTT and the income inclusion rule (IIR), effective since January 2025.
In addition, transfer pricing regulations require companies with international operations to file specific returns, together with master and local files, within 60 days of the CIT return filing deadline. Groups with revenues exceeding QR 3 billion are subject to country-by-country reporting (CbCR). In the case of the QFC, although transfer pricing rules are applicable, no mandatory documentation is required.
Indirect Taxes and Other Obligations
VAT is expected to be introduced in 2026, in accordance with 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 reaching up to 100%.
With regard to withholding taxes, no WHT is levied on dividends, but a 5% tax is imposed on interest payments, royalties, and technical services to non-residents, applicable even if the services are provided outside Qatar. The QFC does not provide for withholding taxes.
Taxpayers must report contracts exceeding certain thresholds (QR 200,000 for services and QR 500,000 for mixed contracts), as well as any contracts with non-residents, regardless of the amount. Failure to comply with these obligations may result in significant penalties.
Incentives for Foreign Investment
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 with prior approval and the possibility of establishing wholly foreign-owned branches when contracting with state entities.
Free 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 in accordance with International Financial Reporting Standards (IFRS) in Arabic. The QFC accepts alternative international accounting principles and allows presentation in English. In addition, mandatory auditing is required for public companies, LLCs, holding companies, and limited partnerships, with mandatory rotation of the auditor every five years.
Exchange Control and Financial Supervision
Qatar does not impose restrictions on the movement of currency, 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 anti-money laundering.
Conclusion
Qatar’s tax system has evolved towards a more complex structure aligned with global standards, without sacrificing its ability to attract investment. The implementation of transfer pricing rules, the adoption of 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 should strengthen their tax compliance strategies and proactively adapt to the new regulatory environment.
Source: Oxford Business Group