- July 18, 2021
- Posted by: Ajmal
Want to live in a tax-free country in the Middle East? Then Qatar is your destination! But hold on…just because Qatar doesn’t have taxes, it doesn’t mean YOU don’t have any taxes! You are still responsible for your US expat taxes and this video explains the details of your filing obligations.
Qatar has become an increasingly popular destination for Americans wishing to live abroad. However, as a US expat, you’ll need to be sure you know the tax laws for both your host country and your home country. Fortunately, we’ve outlined the 6 things you need to know as an expat living in Qatar.
To be considered a resident of Qatar, you must :
• Have been physically present in Qatar for more than 183 days in a 12-month period – not necessarily consecutive days
• Have a permanent home in Qatar, or
• Have a center of vital interest in Qatar
As a US expat, one of the biggest perks of residing in Qatar is the fact that there is no income tax for employees, and no obligation to file a tax return.
For those with business income, tax returns must be filed four months after the end of the tax year, which is December 31. There are no extensions available.
There are minimal financial obligations for residents of Qatar when it comes to social security. As a result, expats have limited access to social services. Fortunately, this means Americans will not need to worry about double taxation.
For most US expats, there are few taxes to be concerned about in Qatar. There are no capital gains taxes, no gift, estate or wealth taxes and there are no value added taxes.
If you are a US citizen or resident, you will still be required to file US taxes each year. If you have assets in foreign bank accounts, you may be required to report those as well. Specifically, anyone with 10,000 dollars or more in a foreign bank or financial institution during a calendar year will be required to file the FBAR.
Fortunately, there are a few ways you can lower or eliminate your US tax obligations. The first is the Foreign Earned Income Exclusion, which allows you to exclude a certain amount from your foreign earned income on your US expat taxes.
The second is the Foreign Tax Credit, which allows you to offset the taxes you paid in your host country with your US expat taxes dollar for dollar.
And third is the Foreign Housing Exclusion, which allows an additional exclusion from income on US expat taxes for certain amounts paid for household expenses that occur as a consequence of living abroad.
If you have any questions about filing your US expat taxes, please contact us.