• Part 15: Concessionary Rate

    • Article 87 - Policy Statement on the Concessionary Rate

      These Regulations provide for a Concessionary Rate to apply to the Chargeable Profits of a QFC Entity in certain circumstances.

      Inserted (as from 18th June 2014)

    • Article 88 - Election for the Application of the Concessionary Rate

      (1) This Part applies to a QFC Entity that is—
      (a) a Qatari Owned QFC Entity;
      (b) a QFC Captive Insurer;
      (c) a Reinsurer; or
      (d) an Investment Manager.
      (2) Subject to Article 88(8), a QFC Entity that is a Qatari Owned QFC Entity or a QFC Captive Insurer may elect for its Chargeable Profits to be charged to tax at the Concessionary Rate.
      (3) Subject to Article 88(8), a QFC Entity that is a Reinsurer may elect for its Chargeable Profits arising from its Reinsurance Business to be charged to tax at the Concessionary Rate and for this purpose income of a Reinsurance Business shall include investment income related to that Reinsurance Business.
      (4) Subject to Article 88(6) and Article 88(8), a QFC Entity that is an Investment Manager may elect for its Chargeable Profits arising from carrying on Qualifying Investment Activities to be charged to tax at the Concessionary Rate.
      (5) Qualifying Investment Activity means:
      (a) managing investments as defined in the QFC Financial Services Regulations Schedule 3, Part 2;
      (b) operating a collective investment fund as defined in the QFC Financial Services Regulations Schedule 3, Part 2;
      (c) operating a Special Investment Fund; or
      (d) managing a Special Investment Fund;
      (6) An election by an Investment Manager under this Article shall only be valid for an Accounting Period if the Investment Manager meets all the following requirements in that Accounting Period:
      (a) The Investment Manager is duly authorized to carry on the Qualifying Investment Activities;
      (b) The Investment Manager employs on a full-time basis an adequate number of qualified investment professionals that are resident in Qatar each earning a total monthly salary (including fringe benefits) of at least QAR 15,000 per month, provided that this number shall not be less than three;
      (c) The value of assets under management of the Investment Manager is at least QAR 150 million;
      (d) The Investment Manager incurs an adequate amount of operating expenses, which shall not be less than QAR 1,000,000 per Accounting Period; and
      (e) The Investment Manager's accounts are audited and reported on by an external auditor.
      (7) An election under this Article shall be made in writing to the Tax Department within 6 months from the end of the first Accounting Period to which the election is to apply and once made will remain in force in respect of the three subsequent Accounting Periods.
      (8) An election under this Article shall only be valid if the QFC Entity has paid the Concessionary Rate Charge to the Tax Department in accordance with Article 91.
      (9) The Tax Department shall monitor QFC Entities that made an election under this Article to ensure that the Core Income Generating Activities are carried out in Qatar.
      (10) An election under this Article will not be valid if the Core Income Generating Activities are not carried out in Qatar or the Tax Department consider that the sole or main purpose of the QFC Entity is the avoidance of tax under these Regulations.
      Amended (as from 18th July 2019)

    • Article 89 - Qatari Owned QFC Entity

      (1) A Qatari Owned QFC Entity is an LLC, which throughout the Accounting Periods to which the election referred to in Article 89 relates, fulfils the following conditions—
      (a) at least 90% of the Ordinary Share Capital of the LLC is beneficially owned, directly or indirectly, by Persons who are Qatari Nationals;
      (b) Persons who are Qatari Nationals are beneficially entitled to at least 90% of any profits of the LLC available for Distribution to equity holders of the LLC;
      (c) Persons who are Qatari Nationals are beneficially entitled to at least 90% of any assets of the LLC available to equity holders on a winding up of the LLC; and
      (d) it is not an Authorised Firm.
      Amended (as from 12th June 2017).

    • Article 90 - Concessionary Rate

      (1) The Concessionary Rate is 0% and where a QFC Entity is taxed at this rate, Part 5 does not apply.
      Inserted (as from 18th June 2014)

    • Article 91 - Concessionary Rate Charge

      (1) The Concessionary Rate Charge is—
      (a) in respect of a QFC Entity which, at the relevant time, has issued share capital of an amount of QR 1,500,000 or less, QR 10,000; or
      (b) in respect of a QFC Entity which, at the relevant time, has issued share capital of an amount above QR 1,500,000, QR 20,000.
      (2) “Relevant time” in Article 91(1) shall mean the last day of the first Accounting Period to which the election referred to in Article 88 is to apply.
      (3) The Concessionary Rate Charge is payable on the day following the expiry of 6 months from the end of the first Accounting Period to which the election referred to in Article 88 is to apply.
      Inserted (as from 18th June 2014)

    • Article 92 - Apportionment of Chargeable Profits

      (1) Where the Chargeable Profits of a QFC Entity are liable to tax under these Regulations in part at the standard rate and in part at the Concessionary Rate, those profits shall be apportioned on a basis which appears to the Tax Department to be just and reasonable.
      Inserted (as from 18th June 2014)