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  • 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 their Local Source Profits, with only one category of Taxable 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 to QFC Entities.

    • Article 8 - Residence and Non-Residence

      (1) A QFC Entity shall be regarded as Resident in Qatar for the purposes of these Regulations if—
      (a) it is incorporated in Qatar under the Company Regulations 2005, the Limited Liability Partnership Regulations 2005, the Partnership Regulations 2007 or any other regulations made under the QFC Law or rules made by the Regulatory Authority or QFC Authority; or
      (b) its place of effective management is in Qatar.
      (2) Where a QFC Entity is treated as resident in a territory outside Qatar and not resident in Qatar for the purposes of any Double Taxation Agreement, such QFC Entity is treated as not Resident in Qatar for the purposes of these Regulations.
      (3) A QFC Entity, which is a branch, shall not be regarded as a Resident 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 in Qatar.
      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 each Accounting Period at the standard rate on every QFC Entity in respect of the full amount of its Local Source Taxable Profits.
      (2) The standard rate of corporation tax is 10%.

    • Article 10 - Local Source

      (1) Taxable Profits are Local Source if they arise in or are derived from Qatar.
      (1A) Notwithstanding any other provisions in these Regulations, profits arising in or derived from Qatar by a QFC Entity that is not an Authorised Firm from the provision of services for use outside Qatar are deemed not to be Local 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 a Financial Institution to the extent that—
      (i) the profits are attributable to the initiation of the underlying loan in Qatar by, or on behalf of, the Financial Institution ; and
      (ii) the risk of default in respect of either (or both) the interest and principal of the loan is borne by the Financial Institution in Qatar,
      provided that where either condition (i) or (ii) is met, but not both, 50% of the relevant profits shall be deemed to be Local Source Taxable Profits.
      (3) Local Source Taxable Profits shall exclude any profit derived from—
      (a) immovable property located outside Qatar;
      (b) Permanent Establishments of the QFC Entity outside Qatar; and
      (c) notwithstanding Article 10(2)(a), the receipt of Passive Interest Income where the borrower is not Resident in Qatar (and the borrowing is not substantially undertaken by or through a Permanent Establishment of the borrower in Qatar) or where the borrower is Resident in Qatar and the borrowing is substantially undertaken by or through a Permanent Establishment of the borrower outside Qatar.
      Amended (as from 12th June 2017).

    • Article 11 - Taxable Profits and Chargeable Profits

      (1) The Taxable Profits of a QFC Entity for an Accounting Period are the Chargeable Profits of that QFC Entity, as reduced by the set off of any tax losses and Group Relief under the provisions of Part 5.
      (2) The Chargeable Profits of a QFC Entity for an Accounting Period are the Accounting Profits, as defined in Article 15, of that QFC Entity from its Licensed 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) The Chargeable Profits of a QFC Entity shall be calculated in the currency of its accounts.
      (2) Where the currency of the accounts of a QFC Entity is not Qatari Riyals the Chargeable Profits shall, subject to Article 12(3), be converted into Qatari Riyals at the closing exchange rate applying on the last day of the Accounting Period in which the Chargeable Profits arose.
      (3) A QFC Entity may elect to use, for the purposes of converting Chargeable Profits into Qatari Riyals, the average exchange rate applying for the Accounting Period in which the Chargeable Profits being converted arose.
      (4) An election under Article 12(3) shall be made in writing to the Tax Department within 6 months of the end of the Accounting Period to which it is to first apply and, once made, shall apply to all subsequent Accounting Periods.
      (5) This Article applies to the calculation of tax losses in the same way as it applies to the calculation of Chargeable Profits.

    • Article 13 - Non Residents

      (1) The Chargeable Profits of a QFC Entity not Resident in Qatar shall be the amount of Chargeable Profits as are attributable to its Permanent Establishment in Qatar.
      (2) The Chargeable Profits attributable under Article 13(1) to a Permanent Establishment shall be the same as the Chargeable 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 a Permanent Establishment.
      (3) In attributing Chargeable Profits to a Permanent Establishment under Article 13(2) the Permanent Establishment shall be assumed to have the same credit rating as the enterprise of which it is a Permanent Establishment.
      (4) In attributing Chargeable Profits to a Permanent Establishment under Article 13(2) there shall be attributed to the Permanent Establishment such equity and loan capital as appears to the Tax Department to be just and reasonable.
      (5) In attributing Chargeable Profits to a Permanent Establishment under Article 13(2), a deduction shall be available to the Permanent Establishment in respect of interest incurred by the enterprise of which it is a Permanent Establishment on indebtedness utilised by the Permanent Establishment in carrying out its activities. If only part of the indebtedness is utilised by the Permanent Establishment in carrying out its activities, a proportion of interest as appears to the Tax Department to be just and reasonable shall be available for deduction.
      Amended (as from 18th June 2014)