TaxSavvyQA

Grossing up WHT when the supplier wants the full amount

The contract says the foreign supplier gets the full invoice. How much WHT do we pay?

The situation

If you bear the WHT, the payment is grossed up so that 5 percent WHT is computed on the grossed up amount.

The law

  • Law No. 24 of 2018 on Income Tax (withholding tax): 5 percent WHT on interest, royalties, technical fees, commissions and service fees paid to non-residents with no Qatar PE; remit by the 16th of the next month

What it means for you

For an invoice of QAR 95,000 paid in full, the gross amount is 95,000 / 0.95 = QAR 100,000 and the WHT is QAR 5,000. That QAR 5,000 is your cost. Many companies negotiate WHT clauses to avoid this.

What to do

  1. Read the tax clause in the contract.
  2. Compute the grossed up base.
  3. File and pay the WHT.
  4. Renegotiate WHT clauses at renewal.

We can do this for youMonthly withholding tax on payments to non-residents and contract notifications: QAR 750

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