Corporation Taxes and obligations for the QFC registered entities

Qatar Financial Centre (QFC) is an onshore business and ­ financial centre located in Doha, providing an excellent platform for ­firms to incorporate and do business in Qatar and the region. The QFC environment offers its own legal, regulatory, tax and business infrastructure, which allows 100% foreign ownership, 100% repatriation of profits, and charges a competitive rate of 10% corporate tax on locally sourced profits. Qatar has extensive and efficient Double Taxation Agreements network with more than 80 countries providing protection and beneficial taxes in cross border taxation.

All entities or firms set up in QFC must register with the QFC Tax Department i.e. whether taxable or exempt or whether active or Dormant. Any firm who does not register within 12 months after receiving their QFC licence may be forcefully registered by the QFC Tax Department. All entities should pay taxes and file tax return within 6 months from the end of financial year. It should also be noted that Qatar has a Transfer Pricing regime and therefore transaction with related parties or group companies should adhere to Arms’ length principle.

QFC also offers incentive with a concessionary tax rate of 0% for business of investment manager, reinsurer, captive insurer or if the business is 90% owned by a Qatari national. Income is eligible for a tax exemption (subject to conditions), if derived through investment funds, holding companies, and Special Purposes Companies (SPCs). Companies deriving dividend receipts, returns on public treasury bonds, or capital gains relating to the disposal of the majority of shareholdings (not less than 10%) are exempt from tax.

The tax losses can be carried forward to be offset against future profits, without any time limit, but they cannot be carried back. Group loss relief is also available for QFC-licensed companies with a 75% ownership relationship.

Please reach out to MBG’s tax team who can advise companies on tax strategy, planning, regulations, and compliance and litigation related requirements.