Withholding Tax

22 March 2018



Most of the companies must be cautious while dealing with Foreign Service Providers, which are not registered in Qatar. Companies must deduct withholding Tax 5 or 7% depending on the type of activity the Service Provider performs at Qatar. Withholding Tax is applicable only on the services performed by the Service Providers to the companies; however, materials are not subject to withholding Tax. Further, any service executed offshore (outside Qatar) is not subject to withholding Tax except royalties or any activity that gives the right to use a name, trademark etcetera. Withholding tax is applicable to service executed onshore (inside Qatar).

Any company that obtains a Tax card is not subject to withholding tax even if the same company does not have a Commercial Registration registered at the Ministry of Economy and Commerce. In any event, a company obtains a Tax Card by executing a job at Qatar; this job falls under the objective of the permanent establishment at Qatar and enables the same company to apply and get a tax card. Tax card needs the approval of the tax department only, and the main contractor must provides a place at the site or office for this permanent establishment to be able to apply and get a Tax Card.

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