TaxSavvyQA

How the foreign owned share is taxed in a joint venture

We are a 51 percent Qatari and 49 percent Indian owned LLC. Is tax charged on the full profit?

The situation

Qatar taxes the share of profit that belongs to non-Qatari and non-GCC owners. The Qatari share is exempt but the company still files one return.

The law

  • Law No. 24 of 2018 on Income Tax (general rate): 10 percent tax on taxable income; 35 percent for petroleum operations
  • Law No. 24 of 2018 and GTA filing rules for Qatari and GCC owned entities: The share of profit owned by Qatari and GCC nationals is exempt, but the entity still files

What it means for you

With taxable profit of QAR 1,000,000, the 49 percent foreign share is QAR 490,000. At 10 percent the tax is QAR 49,000. The 51 percent Qatari share is not taxed. The split follows the actual profit sharing, so check the articles of association if profit is not shared in line with capital.

What to do

  1. Confirm the ownership and profit share in the articles and CR.
  2. Enter the split in the Dhareeba return.
  3. Compute tax at 10 percent on the foreign share.
  4. Keep the shareholder register with the tax file.

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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