• Part 4: Part 4: Computational Provisions

    • Article 19 - Policy Statement on Computational Provisions

      Subject to any other provisions of these Regulations in computing the Chargeable Profits of a QFC Entity for an Accounting Period, expenses, costs or other disbursements may be deducted to the extent that they have been taken into account in arriving at the Accounting Profit of the QFC Entity for that Accounting Period and are incurred for the purpose of generating Local Source Profits or incurred in the operation of a business carried on for the purpose of generating such profits.

    • Article 20 - Scope of Charge

      The Chargeable Profits of a QFC Entity shall include all Local Source income less expenses incurred in generating that income.

      Amended (as from 18th June 2014)

    • Article 21 - Deductions Not Allowable and Charitable Donations

      (1) Subject to any other provisions in these Regulations, in computing the Chargeable Profits of a QFC Entity for an Accounting Period no deduction shall be available in respect of—
      (a) expenses not actually incurred or not supported by documentary evidence;
      (b) depreciation of tangible fixed assets, except as provided for by Article 22;
      (c) financial sanctions imposed by the Tax Department and fines or penalties imposed by any other government agency, in Qatar or overseas;
      (d) any costs connected with unlawful acts;
      (e) amortisation of intangible fixed assets, except as provided for by Article 24;
      (f) waivers of debts between Connected Persons;
      (g) a provision for general bad debts or any other provision of a general nature and any bad debt incurred in relation to a loan where the associated interest income was not subject to tax under these Regulations;
      (h) share based remuneration, except as provided for by Article 25;
      (i) any Distribution, except as provided for by Article 62(4) or Article 65(1);
      (j) overseas corporation tax, except as provided for by Article 40;
      (k) any expenditure incurred generating income that is exempt from tax under these Regulations;
      (l) any expenses, costs or other disbursements which are not shown, to the satisfaction of the Tax Department, to have been incurred in generating Local Source income; or
      (m) expenditure incurred in connection with obtaining or seeking to obtain a QFC Licence.
      (2) Where expenditure is incurred for the generation of Local Source income and non-Local Source income, the amount of expenditure to be allocated to each source shall be apportioned on a basis which is demonstrated to the Tax Department to be just and reasonable.
      (3) Subject to any other provisions in these Regulations (including Article 21(1) and Article 21(2)), in computing the Chargeable Profits of a QFC Entity for an Accounting Period, expenditure incurred in Qatar prior to the granting of its QFC Licence, or the commencement of activities within the terms of its QFC Licence, shall be deemed to have been incurred by a QFC Entity on the first day of its first Accounting Period under these Regulations.
      (4) In computing the Chargeable Profits of a QFC Entity for an Accounting Period, a QFC Entity is entitled to a deduction in respect of donations made by that QFC Entity in the Accounting Period concerned to a Charity established in the State, up to a maximum amount of 5% of the Chargeable Profits of that QFC Entity for that Accounting Period, as calculated prior to the deduction of any donations under this Article.
      Amended (as from 18th June 2014)

    • Article 22 - Depreciation

      (1) Subject to Articles 22(2) and 23, a QFC Entity shall be entitled to a deduction for the depreciation or other impairment of a tangible fixed asset acquired for the purpose of its Licensed Activity of an amount equal to the depreciation charged in its accounts.
      (2) Where depreciation is not calculated in accordance with GAAP, the deduction shall be restricted to the amount which would have been charged under GAAP.
      (3) The total tax deduction for the depreciation of an asset shall not exceed the original cost of the asset.
      (4) The reversal of a depreciation charge on an asset is taxable up to the original cost of the asset.
      (5) The original cost of an asset to a QFC Entity shall be the lower of the cost incurred by the QFC Entity in acquiring the asset and the Market Value of the asset at the time it was acquired by the QFC Entity.
      Amended (as from 18th June 2014)

    • Article 23 - Limits on Depreciation

      (1) The deduction under Article 22(1) shall be limited to 5% per annum of original cost, as defined by Article 22(5) for the following classes of assets—
      (a) aircraft;
      (b) ships;
      (c) industrial buildings and offices; and
      (d) infrastructure assets including but not limited to roads, bridges and port facilities.
      (2) Where depreciation has been limited under Article 23(1) and in a subsequent Accounting Period the depreciation charged in the accounts in respect of that asset is less than 5% of original cost, a tax deduction for depreciation shall be allowed at the annual rate of 5%, provided that—
      (a) the asset is still owned by the QFC Entity and is being used for the purpose of its Licensed Activity;
      (b) the total accumulated tax deduction does not exceed original cost; and
      (c) the total accumulated tax deduction does not exceed the total accumulated depreciation of the asset.
      Amended (as from 18th June 2014)

    • Article 24 - Amortisation of Intangible Fixed Assets

      (1) A QFC Entity shall be entitled to a deduction for the amortisation of an Intangible Fixed Asset acquired for the purpose of its Licensed Activity of an amount equal to the amortisation charged in its accounts.
      (2) Subject to Article 24(4), in the case of an Internal Intangible Fixed Asset, the amortisation deduction under Article 24(1) shall not exceed the amount of taxable income generated from charges for the use, licence or exploitation of the asset.
      (3) An Internal Intangible Fixed Asset is any Intangible Fixed Asset acquired from a Connected Person by a QFC Entity and used (to any extent) to generate Taxable Profits by granting rights to use, licensing or otherwise exploiting the Intangible Fixed Asset.
      (4) Where an Internal Intangible Fixed Asset is acquired from a Connected Person by a QFC Entity for the purposes of both:
      (a) generating Taxable Profits by granting rights to use, licensing or otherwise exploiting the Internal Intangible Fixed Asset; and
      (b) use by that QFC Entity to carry on its Licensed Activity, excluding activities described in Article 24(4)(a),
      the Internal Intangible Fixed Asset shall be deemed to be two distinct notional assets for the purposes of Article 24(2), reflecting an asset used solely for the purposes described in Article 24(4)(a) and an asset used solely for the purposes described in Article 24(4)(b) and Article 24(2) shall only operate to limit an amortisation deduction under Article 24(1) in respect of the notional asset used solely for the purposes described in Article 24(4)(a).
      (5) For the purposes of Article 24(4), the amortisation deduction available under Article 24(1) in respect of the Internal Intangible Fixed Asset shall be apportioned between the two notional assets described in Article 24(4) on a basis which is demonstrated to the Tax Department as being just and reasonable.
      Amended (as from 18th June 2014)

    • Article 25 - Share Based Remuneration

      Remuneration of employees of QFC Entities which is linked to the share price performance of shares listed on a recognised stock exchange shall be allowed as a deduction for an Accounting Period only if it meets the following conditions—

      (a) it is charged in the profit and loss account of the QFC Entity; and
      (b) it is charged in the profit and loss account of the consolidated accounts of the quoted parent Company.