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Qatar: Tax reporting by tax-exempt entities

Guidance issued by the tax authority reflects new tax reporting responsibilities for entities that are exempt from tax.

The tax authority issued Circular No. (2) of 2021 (24 March 2021) regarding the tax filing requirements and deadline for Qatari and Gulf Cooperation Council (GCC) businesses operating in Qatar that are exempt from income tax. The circular revises the threshold amounts necessitating the filing of tax returns plus audited financial statements. Previously, the thresholds were QAR 2 million of capital or QAR 10 million of annual turnover. The new thresholds were reduced to QAR 1 million of capital or QAR 5 million of annual turnover.

A key implication from the circular is that all Qatari or GCC-owned entities that are exempt from income tax must file tax returns—regardless of their income or capital amounts.

Tax Alert on Tax filing for Exempt Entities

The General Tax Authority (GTA) issued Circular No. (2) of 2021 on 24 March 2021, in relation to the
Tax filing requirements and deadline for Qatari and GCC owned businesses operating in Qatar that
are exempt from Income Tax. One of the key implications from this Circular was that all Qatari / GCC
owned entities that are exempt from Income Tax, have to file tax returns regardless of their income or
capital.

In summary –

• Qatari / GCC owned entities that are exempt from Income Tax with a capital of QAR 1 million
or above, or with an annual turnover of QAR 5 million or above, have to submit a complete
Tax return together with audited Financial Statements through Dhareeba. This is an
amendment to the provisions under Circular No. (4) of 2011, which provided a threshold of
QAR 2 million for capital and QAR 10 million for annual turnover.
• Qatari / GCC owned entities that are exempt from Income Tax, which do not meet the
thresholds mentioned above are now also required to submit tax returns together with
financial statements through Dhareeba, whereby a simplified tax return form must be
used.
• In line with adherence to the canons of convenience, simplicity and diversity, the GTA issued
Circular No. (3) of 2021 on 12 July 2021 reiterating on the use of only simplified tax return for
tax exempt entities with a capital of below QAR 1 million and an annual turnover of below
QAR 5 million. Therefore, tax exempt entities whose capital is below QAR 1 million and
whose annual turnover is below QAR 5 million should only submit simplified tax
returns.



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