Transfer Pricing Solutions and Rules - Qatar
In November 2017, Qatar joined the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on base erosion and profit shifting (BEPS), which was established to allow interested countries and jurisdictions to participate in the development of standards on BEPS-related issues.
In 2018, Qatar introduced country-by-country reporting (CbCR) rules, to meet one of the minimum standards for members of the Inclusive Framework. On 13 December 2018, Law No. 24 of 2018 was issued to promulgate a new Income Tax law. The new law replaces Law No. 21 of 2009 and is effective from 14 December 2018.
On 11 December 2019, Qatar's General Tax Authority (GTA) published Executive Regulations (ER) relating to the implementation of Income Tax Law No. 24 of 2018 (Income Tax Law) which included transfer pricing provisions. The ER established TP compliance and documentation requirements for entities in Qatar but required confirmation on threshold and submission deadlines. The Decision requires taxpayers to comply for years starting on or after 1 January 2020.
Transfer Pricing Methods
Entities resident in Qatar, and foreign entities with a permanent establishment in Qatar, are required to submit a TP declaration form through the GTA's online Dhareeba system with their tax return if the value of their total revenue or assets exceeds QAR10m for the income year.
In addition, an entity whose total revenue or assets exceeds QAR50m for the income year and that has at least one group member outside Qatar must submit TP Master and Local files to the GTA by 30 June for the standard reporting year.
The approved method of transfer pricing in Qatar is Comparable Uncontrolled Price Method.
For application of any other pricing method, prior approval must be obtained from the General Tax Authority
Local file
- Resident entities and permanent establishments in Qatar are required to submit Local file on the Dhareeba portal.
- The contents of the Local file are in line with the OECD recommendations. The Local file must contain detailed information on all of the controlled transactions of the taxpayer. It can be prepared in English. The required information is specified in Article 10 of Decision No. 4 of 2020.
Master file
- Resident entities and permanent establishments in Qatar are required to file Master file to the GTA. The requirement to file the Master file is triggered on the GTA's Dhareeba portal for tax returns when a taxpayer meets the stipulated threshold of revenue/assets and selects that it has engaged in transactions with related parties abroad.
- The contents of the Master file are in line with the OECD recommendations.
- In the event that the Qatar taxpayer is a subsidiary of a non-Qatar entity, the Qatar taxpayer needs to obtain a copy of the group's Master File from the non-Qatar head office and realign it with the format prescribed on Dhareeba system.
Country by Country Report
- The CbC reporting/notification rules apply to ultimate parent entities resident in Qatar of a multinational enterprise (MNE) group with consolidated revenues of at least QAR 3 billion in the preceding financial year (ie FY 2017 for FY 2018 CbC reporting purposes).
- An entity that is resident in Qatar for tax purposes and that is part of an MNE group whose ultimate parent entity is not resident in Qatar is not required to file a CbC report or a CbC notification in Qatar.
- Transfer pricing documentation should be maintained by all the resident entities having transaction with related entities.
Information regarding the specific compliance steps, deadlines, and portals required for reporting entities operating within Qatar.
Guidelines and accepted practices for utilizing external benchmarking databases to support transfer pricing documentation in Qatar.