Income Tax Law (24) 2018 And Its Executive Regulation For Qatari And GCC Citizens
29 August 2021
The Income Tax Law and its Executive Regulation stipulate in article 2 para 9-10-11 and article 4 para 9-10-11 respectively that Qatari natural and legal persons are exempted from paying the income tax 10% provided that they are residents in the State of Qatar. Thus, having merely a Qatari ID does not preclude the General Tax Authority from imposing income tax on their shares in profit. Also, the Tax law clearly explains the residency requirements that Qatari and GCC citizens should meet to be able to get this tax exemption.
A natural person who meets any of the following:
- a- Has a permanent home in the State.
- b- Has been in the State of Qatar for more than one hundred and eighty-three (183) consecutive or separate days during any twelve (12) month period.
- c- Has his center of vital interests in the State.
A Legal person that meets any of the following:
- a- It is incorporated under Qatari laws.
- b- Its head office is situated in the State.
- c- Its place of effective management is situated in the State.
Therefore, if Qatari and GCC citizens do not meet the above criteria, their profit share will be subject to income tax of 10%, similar to any other foreign investor. Further, Qatari or GCC citizen should have a direct benefit in the shares he or she owns in the entity as natural or legal person and they have to provide some documents according to circular 4/2020 to prove their actual ownership and benefit in the legal entity. In the Dhareeba system , while filing the Income Tax return, the taxpayer should be objective and provide all supporting documents that prove a Qatari or GCC citizens are residents in the State of Qatar. Hence, this evidence will prevent the General Tax Authority from doubting the accuracy of data filled out in the Dhareeba system.
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