Tax regulations

New income tax regulations will impact Qatari businesses: EY

New income tax regulations will impact Qatari businesses: EY

Jan 27, 2020 – 12:01 AM

Experts posing for a group photo on the sidelines of EY Qatar’s annual tax seminar.

DOHA: Changes introduced in Qatar’s new Executive Regulations of the new income tax law are expected to have a significant impact on Qatari businesses and taxpayers, including updates to the withholding tax regime and the introduction of transfer pricing, according to EY.

To discuss the latest developments in OECD initiatives regarding Profit Tax Base Erosion (BEPS), tax digitization, VAT, Qatar’s latest economic outlook and the country’s budget for 2020 as well as changes in the local business landscape, EY recently hosted a tax seminar in Doha that brought together over 180 tax and entity accounting professionals from Qatar.

Discussing the changes at the EY Tax Seminar, Ahmed Eldessouky, Partner, Business Tax Services, EY, said: “The new regulations introduced many changes, both IT and administrative, that would impact how taxpayers manage their tax obligations.

The new withholding tax (WHT) articles in the Implementing Regulation apply a “consumption test” that it should encompass a wider range of services and will affect businesses both from a tax point of view. and commercial. One of the notable benefits of the changes to the Regulations includes losses carried forward. that previously there was a three-year threshold. The new arrangement is more valuable to the taxpayer from a tax planning perspective, ”Ahmed added.

EY experts also discussed Qatar’s 2020 budget at the seminar and the government’s focus on establishing infrastructure and facilities in free zones, special economic zones, industrial zones. and logistics and the development of new housing areas for nationals.

According to Marcel Kerkvliet, partner of EY International Tax and Transactions Services: “For the development of BEPS 2.0 projects, in particular the BEPS 1 and 2 pillars, companies must, among other actions, follow the developments of the OECD, understand the perspective of countries that are relevant to the business footprint and communicate with management stakeholders. Although VAT laws and regulations have not been published, the GCC Framework Agreement on VAT and the laws of other GCC states contain sufficient guidance to enable businesses to start their business preparation project. VAT. Based on experience, most businesses need at least six months to be ready.

According to EY, the income or asset threshold is not yet established, therefore, entities should start reviewing their TP agreements and consider preparing for the possibility of submitting the required local TP documentation and compliance. ‘by end of April 2020. Failure to comply with the new TP rules may result in the imposition of penalties in accordance with the Income Tax Act.

The seminar also touched on the topic of tax digitization where GCC tax authorities including Qatar are moving towards digitization at a rapid pace – a strong incentive for companies to keep pace, if not faster, to maximize these opportunities.

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