• Part 3: Part 3: Accounting Profit and Accounting Periods

    • Article 14 - Policy Statement on Accounting Profit and Accounting Periods

      QFC Entities are expected to draw up accounts under IFRS or other acceptable GAAP. This Part also deals with a change of accounting basis and defines Accounting Periods.

    • Article 15 - Accounting Profit

      (1) The Accounting Profit of a QFC Entity is the profit, including any capital profits, before the payment of tax and dividends as reflected in the QFC Entity's profit and loss account or income statement, based on accounts prepared in accordance with GAAP and the laws of the QFC.
      (2) Subject to Article 15(3), for the purposes of this Article accounts prepared in accordance with GAAP means—
      (a) accounts prepared in accordance with IFRS, UK GAAP or US GAAP; or
      (b) accounts prepared in accordance with standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).
      (3) A QFC Entity may apply to the Tax Department to use, for the purposes of corporation tax, a basis of accounting different to that set out in Article 15(2).
      (4) An application under Article 15(3) shall—
      (a) be in writing;
      (b) be submitted to the Tax Department prior to the start of the Accounting Period to which it relates;
      (c) set out the reasons why the QFC Entity wishes to use a different basis of accounting; and
      (d) provide details of the basis of accounting the QFC Entity wishes to adopt.
      (5) The Tax Department shall, within 60 days of receiving an application under Article 15(3), notify the QFC Entity of its decision in writing.
      (6) If the Tax Department fails to issue a notice under Article 15(5) within 60 days of receiving an application under Article 15(3) the like consequences shall ensue as would have ensued if the Tax Department had, within 60 days of the application being received, issued a notice under Article 15(5) accepting the application.
      (7) Where it is necessary, in order to arrive at the Accounting Profit for any Accounting Period, to apportion to specific Accounting Periods the Accounting Profit for any period for which the accounts of a QFC Entity have been made up, it shall be lawful to make such an apportionment in proportion to the number of days in the respective periods.
      Amended (as from 18th June 2014)

    • Article 16 - Change in Basis of Accounting

      (1) This Article applies when in a change period—
      (a) the basis of accounting adopted by a QFC Entity under Article 15 is changed and the change gives rise, in accordance with GAAP, to a prior period adjustment to closing reserves; or
      (b) there is a change of accounting policy in drawing up a QFC Entity's accounts from one period of account to the next and the change gives rise, in accordance with GAAP, to a prior period adjustment to closing reserves.
      (2) For the purposes of this Article "change period" means the Accounting Period in which the change in accounting basis or change of accounting policy is first adopted.
      (3) Where Article 16(1) applies the prior period adjustment shall be treated as though it took place on the first day of the change period and shall be included in the Accounting Profit for that period.
      (4) In this Article "closing reserves" means the reserves at the end of the Accounting Period immediately prior to the change period.
      Amended (as from 18th June 2014)

    • Article 17 - Accounting Period

      (1) An Accounting Period of a QFC Entity shall begin for the purposes of corporation tax whenever—
      (a) the QFC Entity, not then being within the charge to tax under these Regulations, comes within it by commencing activities within the terms of its QFC Licence; or
      (b) an Accounting Period of the QFC Entity ends without it then ceasing to be within the charge to tax under these Regulations.
      (2) Subject to Article 17(3), an Accounting Period of a QFC Entity shall end for the purposes of corporation tax on the first occurrence of any of the following—
      (a) the expiration of 12 months from the beginning of the Accounting Period;
      (b) the date to which the QFC Entity makes up its accounts;
      (c) the QFC Entity ceasing to have any source of income within the terms of its QFC Licence;
      (d) the QFC Entity becoming Resident in Qatar; or
      (e) the occurrence of one or more of the events mentioned in Article 18(1).
      (3) The Tax Rules may provide for an extension of the term of an Accounting Period (Tax 8).
      Amended (as from 18th June 2014)

    • Article 18 - Deemed Disposals

      (1) This Article applies whenever a QFC Entity
      (a) gives up or has its QFC Licence revoked;
      (b) ceases to be Resident in Qatar; or
      (c) appoints a liquidator at the commencement of a winding up under the Insolvency Regulations 2005.
      (2) Subject to Articles 18(3) and (4), on the occurrence of any of the events in Article 18(1) the QFC Entity will be treated as though, immediately prior to the occurrence of the first such event, it disposed of and immediately reacquired all of its assets and liabilities at their Market Value.
      (3) When a QFC Entity ceases to be Resident in Qatar, without an event in Article 18(1)(a) or (c) occurring, Article 18(2) does not apply to any assets and liabilities retained by a Permanent Establishment situated in Qatar of that QFC Entity.
      (4) Article 18(2) will only be applied once to the same QFC Entity but where Article 18(3) applies, Article 18(2) will not be regarded as having been applied in respect of the assets and liabilities retained by the Permanent Establishment situated in Qatar.
      Amended (as from 18th June 2014)