Part 2: Part 2: General Scheme of Taxation, Residence and the Charge to Tax
Article 6 - Policy Statement on the General Scheme of Taxation
QFC Entities are taxed on theirLocal Source Profits , with only one category ofTaxable Profits .Article 7 - Scope of Regulations
These Regulations provide for the imposition, administration and collection of tax in accordance with Article 17 of the
QFC Law in relation toQFC Entities .Article 8 - Residence and Non-Residence
(1) AQFC Entity shall be regarded asResident in Qatar for the purposes of these Regulations if—(a) it is incorporated inQatar under the Company Regulations 2005, the Limited Liability Partnership Regulations 2005, the Partnership Regulations 2007 or any other regulations made under theQFC Law or rules made by theRegulatory Authority orQFC Authority ; or(b) its place of effective management is inQatar .(2) Where aQFC Entity is treated as resident in a territory outsideQatar and not resident inQatar for the purposes of anyDouble Taxation Agreement , suchQFC Entity is treated as notResident in Qatar for the purposes of these Regulations.(3) AQFC Entity , which is a branch, shall not be regarded as aResident in Qatar in accordance with Article 8(1)(b) unless the place of effective management of the enterprise of which it is a branch is inQatar .Amended (as from 18th June 2014) Article 9 - The Charge to Tax
(1) Subject to the provisions of these Regulations, corporation tax shall be charged for eachAccounting Period at the standard rate on everyQFC Entity in respect of the full amount of itsLocal Source Taxable Profits .(2) The standard rate of corporation tax is 10%.Article 10 - Local Source
(1)Taxable Profits areLocal Source if they arise in or are derived fromQatar .(1A) Notwithstanding any other provisions in these Regulations, profits arising in or derived fromQatar by aQFC Entity that is not anAuthorised Firm from the provision of services for use outsideQatar are deemed not to beLocal Source Taxable Profits to the extent that the conditions set out in Rule 1A are met.(2) Without prejudice to the generality of Article 10(1),Local Source Taxable Profits are deemed to include—(a)Passive Interest Income ; and(b) notwithstanding the provisions of Article 13, profits arising from interest income received by or accrued to aFinancial Institution to the extent that—(i) the profits are attributable to the initiation of the underlying loan inQatar by, or on behalf of, theFinancial Institution ; and(ii) the risk of default in respect of either (or both) the interest and principal of the loan is borne by theFinancial Institution inQatar ,provided that where either condition (i) or (ii) is met, but not both, 50% of the relevant profits shall be deemed to beLocal Source Taxable Profits .(3)Local Source Taxable Profits shall exclude any profit derived from—(a) immovable property located outsideQatar ;(b)Permanent Establishments of theQFC Entity outsideQatar ; and(c) notwithstanding Article 10(2)(a), the receipt ofPassive Interest Income where the borrower is notResident in Qatar (and the borrowing is not substantially undertaken by or through aPermanent Establishment of the borrower inQatar ) or where the borrower isResident in Qatar and the borrowing is substantially undertaken by or through aPermanent Establishment of the borrower outsideQatar .Amended (as from 12th June 2017). Article 11 - Taxable Profits and Chargeable Profits
(1) TheTaxable Profits of aQFC Entity for anAccounting Period are theChargeable Profits of thatQFC Entity , as reduced by the set off of any tax losses andGroup Relief under the provisions of Part 5.(2) TheChargeable Profits of aQFC Entity for anAccounting Period are theAccounting Profits , as defined in Article 15, of thatQFC Entity from itsLicensed Activity and as adjusted by the provisions of these Regulations, excluding Part 5.Amended (as from 18th June 2014) Article 12 - Currency of Tax Calculation
(1) TheChargeable Profits of aQFC Entity shall be calculated in the currency of its accounts.(2) Where the currency of the accounts of aQFC Entity is not Qatari Riyals theChargeable Profits shall, subject to Article 12(3), be converted into Qatari Riyals at the closing exchange rate applying on the last day of theAccounting Period in which theChargeable Profits arose.(3) AQFC Entity may elect to use, for the purposes of convertingChargeable Profits into Qatari Riyals, the average exchange rate applying for theAccounting Period in which theChargeable Profits being converted arose.(4) An election under Article 12(3) shall be made in writing to theTax Department within 6 months of the end of theAccounting Period to which it is to first apply and, once made, shall apply to all subsequentAccounting Periods .(5) This Article applies to the calculation of tax losses in the same way as it applies to the calculation ofChargeable Profits .Article 13 - Non Residents
(1) TheChargeable Profits of aQFC Entity notResident in Qatar shall be the amount ofChargeable Profits as are attributable to itsPermanent Establishment inQatar .(2) TheChargeable Profits attributable under Article 13(1) to aPermanent Establishment shall be the same as theChargeable Profits it would have made if it were a distinct and separate entity, engaged in the same or similar activities under the same or similar conditions, dealing wholly independently with the enterprise of which it is aPermanent Establishment .(3) In attributingChargeable Profits to aPermanent Establishment under Article 13(2) thePermanent Establishment shall be assumed to have the same credit rating as the enterprise of which it is aPermanent Establishment .(4) In attributingChargeable Profits to aPermanent Establishment under Article 13(2) there shall be attributed to thePermanent Establishment such equity and loan capital as appears to theTax Department to be just and reasonable.(5) In attributingChargeable Profits to aPermanent Establishment under Article 13(2), a deduction shall be available to thePermanent Establishment in respect of interest incurred by the enterprise of which it is aPermanent Establishment on indebtedness utilised by thePermanent Establishment in carrying out its activities. If only part of the indebtedness is utilised by thePermanent Establishment in carrying out its activities, a proportion of interest as appears to theTax Department to be just and reasonable shall be available for deduction.Amended (as from 18th June 2014)