Doha, 6 October 2010
The Qatar Financial Centre Authority (“QFC Authority”) is pleased to announce that the new tax regime and regulations for the Qatar Financial Centre have now been enacted, with the following key features:
• 10% corporation tax on locally sourced profits
• Self assessment regime and advance transaction ruling scheme
• Tax incentives for reinsurance, captive insurance and asset management profits
• Zero personal income tax unchanged
• New regulations ensure QFC inclusion in Qatar tax treaties negotiated with other countries
The New Regime
Under the new regime, which has effect from 1 January 2010, all QFC registered companies are subject to 10% corporation tax to be charged on locally sourced profits. This compares favourably with many other financial centres which often have higher rates of tax or have other charges/ fees and taxes on turnover rather than profits.
As part of the QFC’s determination to give certainty to license firms, an advance transaction ruling scheme has been incorporated into the regime, to give firms certainty of tax treatment. Tax returns and payment are due a reasonable 6 months after the end of each accounting period.
The new regime is being administered on a self-assessment basis.
The tax regime was originally announced in 2006 and replaces the temporary tax holiday which ended on 31 December 2009.
The introduction of these tax regulations is integral to the QFC’s long term strategy and this low rate has been introduced to encourage further investment in Qatar and in particular in the QFC. Personal income tax remains unchanged at 0%.
The QFC is leading the expansion of Qatar’s financial services sector, providing a uniquely sustainable platform for regional growth in reinsurance, captives and asset management and as such there are tax incentives in these three key strategic areas.
There are specific rules for Islamic Finance transactions to ensure equality of tax treatment with conventional finance transactions.
The Rationale
The regime has been designed as part of the QFC’s plan to provide an attractive environment for financial services firms to invest in Qatar, providing clarity of law and transparency of administration, whilst ensuring that firms contribute to the tax income of the State of Qatar. The QFC will be included within any tax treaties the Government of Qatar might negotiate with other countries, which is a critical factor for the success of an international financial centre.
The new regime has been developed over the last three years in close cooperation with the Ministry of Economy and Finance, and the financial services industry.
Shashank Srivastava, acting CEO of the QFCA said: ‘It is important to have a viable tax regime that ensures a sustainable economy. We believe we have achieved the ideal balance for companies that operate here and the State of Qatar, which provides such world class services and access to one of the world’s most attractive investment pools.’
Ian Anderson FCA, CFO and Director of Tax, said ‘The QFC was set up to be an onshore financial centre. By providing a very favourable tax environment we are hoping to attract real businesses that will add value to Qatar. With this new regime in place we have also given constituent members of the QFC a high degree of long-term certainty over their local tax affairs.’
Presentations will be held in November covering the detail of the new regulations, and the practical aspects of completing returns and paying tax. A series of guidance notes covering the Tax Departments interpretation of specific areas of the regulations will be published on the website to assist firms in making their tax returns.
Enquiries:
Qatar Financial Centre Authority
Stephen Carriere
Head of Marketing and Corporate Communications
Qatar Financial Centre Authority
Tel: +974 496 7784 - email: s.carriere@qfc.com.qa
www.qfc.com.qa
Notes to Editors
About QFC
The Qatar Financial Centre (QFC) is a financial and business centre established by the Government of Qatar and located in Doha. It has been designed to attract international financial services institutions and major multi-national corporations in particular those operating in the reinsurance, captive insurance and asset management sectors and to encourage participation in the growing market for financial services in Qatar and elsewhere in the region. The QFC operates to international standards and provides a first class legal and business infrastructure for those operating within the QFC. The QFC was created by Qatar Law No. (7) and has been open for business since 1 May 2005.
QFC Authority
The QFC Authority is the commercial, administrative and legislative body responsible for leading the expansion of Qatar’s financial services sector, providing a uniquely sustainable platform for regional growth in reinsurance, captive insurance and asset management.