Amending Provisions of Income Tax Law Applies Exclusively to International Companies

General Tax Authority

The General Tax Authority (GTA) said that the draft law amending some provisions of the Income Tax Law in the State of Qatar, which was approved by the Shura Council on Monday, applies exclusively to international multinational companies with foreign branches, whose annual revenues exceed QR 3 billion , whether Qatari companies with branches outside the country, or international companies with branches in Qatar.

The Shura Council approved during its regular weekly session held Monday, a draft law amending some provisions of the Income Tax Law issued by Law No. 24 of 2018, and referred it to the esteemed government, in a step aimed at ensuring tax justice between local companies and international companies operating in the country, by approving a global minimum corporate tax rate of 15 percent.

Nasser Ali Al Hejji, Director of Public Relations and Communications at the General Tax Authority (GTA) , said that the amendments to the law do not relate to individuals, and that the amendment does not include taxpayers from individuals or local companies operating in Qatar, which are currently subject to a 10 percent corporate income tax, noting that this would enhance equality in tax rules at the state level.

AlHejji added in a special statement to Qatar News Agency (QNA) that the amendment achieves many economic benefits, most notably protecting global Qatari companies from paying the (15 percent) tax outside the country, and retaining the tax share within Qatar to benefit from it in supporting the national economy, as this percentage will be imposed by other countries on the targeted companies in the event that it is not collected locally.

He stressed that the General Tax Authority continues to support international efforts to combat the erosion of the tax base, and the transfer of profits to contribute to improving the national and international economic environment, and to achieve the goals of Qatar National Vision 2030 through a tax system that enhances sustainable national development, and an efficient tax system within a legislative environment that adopts the principles of governance and transparency.

The amendment to the law comes to enable multinational companies to submit their tax returns related to the supplementary minimum tax in the country, within the framework of achieving the requirements of the Organization for Economic Co-operation and Development (OECD) and the G20.

In October 2021, more than 140 countries joined the initiatives presented by the G20 and the Organization for Economic Co-operation and Development (OECD) to implement the provisions of the global rules in the first and second pillars, with the aim of addressing the tax challenges arising from the digitalization of the economy and protecting the tax base of countries, by imposing a global minimum tax on global companies.

The Director of the Public Relations and Communication Department at the General Tax Authority noted that there is a package of benefits that can be achieved from this amendment, most notably reducing the risks of double taxation and ensuring the settlement of tax obligations locally, in addition to enhancing tax transparency, as it limits the exploitation of low-tax areas and encourages fair competition and supports tax compliance through clear rules that include the inclusion of income and tax requirements, in addition to enhancing investment confidence in Qatar as a destination with clear and fair tax laws, and prevents the imposition of additional taxes on local profits from other countries, which preserves revenues within Qatar. He added that the main benefits also include fairness and stability, as clear operating rules for multinational companies contribute to providing a stable and predictable business environment, in addition to defining the scope and restrictions where the tax is applied only to companies that exceed the specified revenue threshold, while ensuring that it does not affect local companies, in addition to economic benefits such as ensuring that the tax share is retained within Qatar and protecting global Qatari companies from paying a 15 percent tax outside the country.

(QNA)