TaxSavvyQA

Branch of a foreign company filing its first Qatar return

We opened a branch of our UK company in Doha last year. What is different for our first tax return?

The situation

A branch is taxed on Qatar profits at 10 percent and must attach audited accounts because its head office is outside Qatar.

The law

  • Law No. 24 of 2018 on Income Tax (general rate): 10 percent tax on taxable income; 35 percent for petroleum operations
  • Executive Regulations of Law No. 24 of 2018 (audited financial statements): Audited IFRS accounts must go with the return if capital exceeds QAR 200,000, income exceeds QAR 500,000 or the head office is abroad; accounts in Arabic from 2020
  • Executive Regulations of Law No. 24 of 2018 (books and records): Books and documents for Qatar activity are kept in Qatar for ten years

What it means for you

Even a small branch must have audited accounts, since the head office test applies regardless of size. Head office charges need support and an arm's length basis, and any payment to the head office for services may need WHT review. Books must be kept in Qatar for ten years, so do not keep the only ledger in London.

What to do

  1. Confirm the first accounting period with the GTA if it is not a calendar year.
  2. Keep a Qatar ledger and documents locally.
  3. Get a Qatar audit in Arabic.
  4. Review head office recharges for deductibility and WHT.

We can do this for youAnnual corporate income tax return on Dhareeba for a foreign owned company or branch: QAR 6,500

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