Corporate Taxation Regulations in Qatar
Most people who come to Qatar to set up a company always are at awe at the tax rules and regulations. The companies are rumoured to be tax-free. This is the simple misunderstanding that many start-ups begin with.
Steve was no different. He had to understand what the laws of the country were and that every company must pay tax on profit made. His move from being a salaried person who had no tax whatsoever to an entity which now needs to worry about how it is being taxed has had its impact on his level of stress. He wanted to be sure that the information he had was correct. Having asked around with people he knew and realising that there is no concrete answer that he is getting, he decided to seek professional help and ask BBMS, who are his 51% share partner, to help explain this to him.
As BBMS, we were quite happy to help him understand that as a new company, his entity would have to consider various requirements and a critical part of it was going to be selecting an auditor.
Steve needed to understand that BBMS in itself, could not assist him in his needs to hire an Auditor; however, it is paramount that he needed to employ the services of an audit firm because it is the law of the land.
We helped him understand that there are various services that need to be considered. Above all the audit firm should be registered in the State of Qatar. However, here are some of the services that this company should provide:
Applying for the Tax Card - In the case of Steve, when he had incorporated his entity, he was in possession of a preliminary tax card. This added to his confusion as he was wondering why he needed to re-apply for another tax card if he has one already. We had to help him understand that this card is a temporary tax card and is only a confirmation that the company is registered with the tax department and this preliminary card has the same number as the Commercial Registration. The auditor you are choosing is required to apply on behalf of your entity for the permanent Tax Card which will have to also outline the company’s Tax Identification number (TIN) that will be provided.
Submission of Audited Accounts - All companies within the country would be required to submit their audited financial statements. Should the company be owned partially by a foreign party, the stipulated tax declarations need to be submitted to the tax department as well. The tax law ensures that each return that is filed is co-signed by a registered auditory in the State of Qatar. All companies are stipulated to close their books by the end of the year (31 December), and the auditor must submit your financial reports by the end of the following April along with any taxes if there are any. Some of these timelines if broken can invite fines up to Qrs. 15,000. The tax law is written in such a manner that all accounts need to be prepared in accordance with International Financial Reporting Standards. However, there is a possibility to make an application to use an alternate accounting method should you need it.
These are the minimum requirements for an Auditor. Steve was able to make an informed decision on which auditor made sense to him by doing some background checks and ensuring that the offers the various auditors made were in line with his business needs as well. Since you have auditors such as the Big 4 to small players in the field, one needs to be aware that there are a lot of choices in the market; however, you need to ensure that you choose an auditor that best fits your needs.
As BBMS has assisted over 100 companies in setting up locally in the State of Qatar over the last decade, we are able to share with you a plethora of knowledge to help you in your company’s success, however, as we are not a qualified tax advisor, we would always recommend you speak with the experts in the field for further information and requirements.
If you are looking to set up a company or would like to understand the best ways to invest into the country, feel free to reach out to us at email@example.com or call us at +974 4012 0333