Article 119 - Financial Sanctions Relating to Returns

(1) A QFC Entity which fails to file a return for an Accounting Period under Article 109 by the filing date as defined by Article 111, or the filing date as extended under the Tax Rules (TAX 8), is liable to a flat-rate financial sanction under this Article. It may also be liable to a tax-related financial sanction under Article 119(4).
(2) The flat-rate financial sanction is—
(a) QR 3,000, if the return is delivered within 60 days from the filing date as defined by Article 111; and
(b) QR 6,000, in any other case.
(3) The flat-rate financial sanctions under Article 119(2) are increased to QR 5,000 and QR 10,000 respectively where—
(a) the QFC Entity is within the charge to tax under these Regulations for three consecutive Accounting Periods;
(b) the QFC Entity is obliged to file a return for each of those Accounting Periods under Article 109;
(c) the QFC Entity was liable to a penalty under Article 119(1) in respect of the first two of those Accounting Periods; and
(d) the QFC Entity is liable to a penalty under Article 119(1) in respect of the third Accounting Period.
(4) A QFC Entity which fails to file a return for an Accounting Period under Article 109 within 12 months after the filing date as defined by Article 111, or the filing date as extended under the Tax Rules (TAX 8), is liable to a tax-related financial sanction, in addition to any flat-rate financial sanction under Article 119(1).
(5) The tax related financial sanction is—
(a) the higher of QR 10,000 or 10% of any unpaid tax, if the return is delivered within 18 months after the filing date; and
(b) the higher of QR 20,000 or 20% of any unpaid tax, in any other case.
(6) The “unpaid tax” means the amount of tax payable by the QFC Entity for the Accounting Period which the return was required remaining unpaid on the date the liability to the financial sanction under this Article arises.
(7) Where corporation tax is charged by an assessment issued under Article 128 or by a determination made under rule 8.2 of the Tax Rules, “tax payable by the QFC Entity for the Accounting Period which the return was required” in Article 119(6) shall mean the amount of tax assessed or determined to be payable by the Tax Department under Article 128 or rule 8.2 of the Tax Rules, respectively.
(8) A financial sanction under Article 119(1) or the tax related financial sanction under Article 119(4) may be set aside if it appears to the Tax Department, on application in writing by the QFC Entity for that purpose, that throughout the period of default the QFC Entity had a reasonable excuse for not filing the return. An application under this Article may not be made until the return in question has been filed and must be made within 30 days of that date.
(9) A QFC Entity which—
(a) fraudulently or negligently files a return which is incorrect; or
(b) discovers that a return filed by it, neither fraudulently or negligently, is incorrect and does not remedy the error without unreasonable delay,
is liable to a tax-related financial sanction of an amount not exceeding the tax understated.
(10) The tax understated in Article 119(9) is the difference between the amount of tax payable by the QFC Entity for the Accounting Period for which the return is filed and the amount of tax which would have been so payable on the basis of the return filed.
Amended (as from 18th June 2014)