Business entities in Qatar will be required to pay an annual tax of 10% of their revenues under a new law issued yesterday by HH the Heir Apparent and Deputy Emir, HH Sheikh Tamim bin Hamad al-Thani.

The tax law will be levied on the revenues of business activities, contracts – which are being partly or wholly implemented – properties, including the sales of stakes in the shareholding companies or the privately-owned companies whose assets are mainly comprised of properties. Rrevenues of the natural sources excavation or exploration in the state and the loan interest rates obtained within the state are also taxable.

The law will take effect as of January 1, 2010.

According to article 12, companies subject to the income tax will be obliged to register with a department, to be set up later, under the Ministry of Economy and Finance within 30 days of getting the authorities’ approval to do business in the country.

Article 14 stipulates that companies shall file an annual tax statement showing their incomes subject to tax and the deserved tax value within four months after the end of the tax year.

Companies with a capital exceeding QR100,000, or with tax-subject income exceeding QR100,000, or with headquarters located outside the country, will be required attach a copy of their final results checked by a certified auditor in the state.

Article 30 states that a committee will be set up under the Ministry of Economy and Finance to which companies can file their tax-related complaints and challenge the decision of the department about the estimation of the tax.

Companies failing to file their tax statements will be fined QR100 for each day’s delay with a maximum of QR36,000.

A penalty of three-month imprisonment term or a maximum fine of QR15,000 or both penalties will be applied to those who file false information, or try to evade tax by hiding the real income, says Article 43.

In addition to the previous penalty, a further fine of 20% of the deserved tax will be applied on companies proved to be in violation of the tax law.

Penalties will be tightened in case of frequent violation of the tax law by companies.

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