TaxSavvyQA

Management fee from head office

Our parent charges a management fee. How do we defend it?

The situation

Related party charges must be at arm's length; the GTA can substitute arm's length values.

The law

  • GTA President's Decision No. 4 of 2020 (transfer pricing documentation): TP declaration if revenue or assets are QAR 10 million or more; Master File and Local File if QAR 50 million or more and a related party abroad
  • Law No. 24 of 2018 on Income Tax: Taxes income arising in Qatar; replaced Law No. 21 of 2009

What it means for you

The GTA can replace related party prices with arm's length values. Keep the service agreement, the cost base, allocation keys and evidence that services were received, such as reports and emails. Remember the 5 percent WHT on fees paid to a non-resident parent.

What to do

  1. Get a signed service agreement.
  2. Keep evidence that services were received.
  3. Benchmark the mark up.
  4. Apply 5 percent WHT on the fee.

We can do this for youTransfer pricing declaration, Master File and Local File: QAR 9,000

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