Tax Retention advisory

Tax retention is a notable part of Qatar’s tax system where there is no other form of Withholding tax. It is applicable for project-specific payments made by public entities, including the government, to a temporary branch of non-resident businesses working on particular projects. The higher amount of either a prescribed percentage of the contract value or the final payment amount must be retained by the company. This retained amount can be released with the General Tax Authority’s clearance in the form of a tax clearance certificate. Resident companies and permanent branches of foreign companies can secure the release with their tax card so this is not applicable to them.

MBG’s experts support you through the procedure with:

• Advice on tax retention laws
• Implications of retention under country income tax laws and vis-a-vis Double Tax Avoidance Agreements where applicable
• Advice on getting the retained 5% tax released with the TCC and other requirements
• Counsel and support on compliances like income tax returns and others
• Permanent establishment (PE) implications under Qatari income tax laws
• Advice, guidance, and support vis-a-vis the Double Tax Avoidance Agreements (DTAA) perspective
• PE and Fee for Technical Services (FTS) implications
• Tax retention-related implications on tax rates, compliance etc.
• Guidance on avoidance of PE exposure
• Beneficial and other tax provisions and how they interact with Qatar’s income tax laws
• Examination of lower tax rates wherever applicable, including by exemptions and exclusions