In April 2019, Qatar’s General Tax Authority (GTA) has issued Circular No. 14 of 2019 following previous Law No. 24 of 2018 (the new tax law). The circular provides guidelines to the taxpayers on certain transitional provisions for implementing the new tax law.
The main areas addressed in the circular are as follows:
Effective date
One of the key points of this circular is the new law is effective on or after 13 December 2018. Taxpayers have to pay a rate of 35% for income from petrochemical operations for the accounting periods starting on or after 13 December 2018.
Withholding tax rates
A tax rate of 5% will apply to contracts concluded on or after 13 December 2018. If the contracts were entered into prior to 13 December 2018, the withholding tax rates will apply as follows:
- If the payments were unpaid before 13 December 2018, withholding tax rates under the previous tax law would be applied even if the actual payments were made after 13 December 2018.
- If the payments were due after 13 December 2018, withholding tax rates should be applied under the provisions of the new tax law.
Financial penalties
Financial penalties before 13 December 2018 and continued after 13 December 2018 would be calculated according to the previous tax law until 16 February 2019. The effective date of the penalty provisions under the new law is 17 February 2019.
Provisions of the circulars issued under Law No. 21 of 2009
The following circulars will remain applicable until further notice from the GTA:
- Circular 2 of 2011 (tax retention and withholding tax requirements);
- Circular 3 of 2011 (instructions to Ministries and other Government bodies on certain tax obligations); and
- Circular 4 of 2011 (tax return submission requirements for entities wholly owned by Qatari and GCC nationals).
Arabic language requirements
According to law no. 7 of 2019, taxpayers must use Arabic in their correspondence and clarifications submitted to the tax authority from 13 July 2019. For tax years beginning on or after 1 January 2020, the financial statements also must be prepared in Arabic.
