Does Qatar Have Income Tax? Explaining the Tax System

Qatar’s status as an economic center in the Middle East, built on its oil and natural gas reserves, often leads to questions from expatriates and international businesses about the country’s tax structure. The framework governing financial obligations for individuals and corporations presents a unique landscape compared to many other nations.

Taxation on Personal Income

Qatar does not impose personal income tax on salaries, wages, or allowances. This policy applies equally to Qatari nationals and expatriates residing in the country. Consequently, there is no requirement for employees to file an annual income tax return related to their employment earnings.

While employment income is not taxed, Qatari nationals are subject to mandatory social security contributions. These payments are deducted from their salaries to fund pensions and other social benefits. This requirement does not extend to the expatriate population, who are not participants in the state social security system and therefore do not have these amounts withheld from their pay.

It is important to distinguish between employment income and income generated from personal business activities. If an individual, regardless of nationality, engages in a commercial activity or trade within Qatar, the resulting profits are not considered personal salary. Instead, this income is classified as business income and becomes subject to the corporate tax regulations of the country.

Business and Corporate Taxation

The state imposes a corporate income tax (CIT) on the business profits of companies. The CIT rate is a flat 10% on taxable income sourced within the country. This tax applies to the share of profits attributable to foreign partners or entities, as companies wholly owned by Qatari or other Gulf Cooperation Council (GCC) nationals are typically exempt from CIT.

Qatar-sourced income is broadly defined and includes profits from any activities performed in the country, such as fulfilling a contract, as well as income from property located in Qatar. Capital gains derived by a company are also included in its taxable income and taxed at the standard 10% rate. For businesses operating in the oil and gas sector, a much higher minimum tax rate of 35% is applied.

Qatar introduced a 15% global minimum tax effective from the beginning of 2025. This tax applies to multinational enterprises with annual revenues exceeding €750 million (approximately QAR 3 billion), bringing Qatar’s policy in line with the OECD’s Pillar Two framework.

Certain entities may benefit from tax incentives or exemptions. For example, companies operating within designated economic zones, such as the Qatar Financial Centre (QFC) or Qatar Free Zone (QFZ), may be subject to different rules or granted tax holidays. The QFC generally applies a 10% corporate tax on profits but provides exemptions for specific entities, such as those listed on the Qatar Stock Exchange that meet certain conditions.

Other Notable Taxes in Qatar

Qatar levies a withholding tax on specific payments made to non-residents who do not have a permanent establishment in the country. A 5% withholding tax is applied to royalties and technical service fees paid to non-residents for services utilized within Qatar. This tax must be deducted by the Qatari-based payer and remitted to the General Tax Authority.

Goods imported into Qatar from outside the GCC are subject to customs duties. The standard rate for most imported products is 5%. This duty is calculated based on the value of the goods and is payable at the port of entry.

Qatar also implements an excise tax on specific goods that are considered harmful to human health or the environment. This consumption tax is levied on items such as tobacco products, carbonated drinks, and energy drinks. The tax rates are significant, often 100% for tobacco and energy drinks and 50% for sugary drinks.

Notably, Qatar is one of the few GCC countries that has not yet implemented a Value Added Tax (VAT). While the introduction of a 5% VAT is anticipated, it has not been enacted as of mid-2025.