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
(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;
(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
(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)|