Doing business in Qatar is definitely the ideal way to start on the right footing in the Middle East. Just the low corporate tax (10% actually) is already attractive enough to any budding entrepreneurs and established businesses worldwide to start there. As such, one of the more important considerations for any company that wishes to do business in Qatar is that of their accounting matters/services. Below is a listing of accounting matters that one is recommended to pay attention to.
Bookkeeping and Account Reporting Services
As an important part of any accounting matters or services, bookkeeping is integral to a company to keep track of their cash flow.
Particular attention must be given to:
- – Keeping a monthly record that is in line with the International Financial Reporting Standards (IFRS) and local regulations set by the Ministry of Economy and Commerce
- – Preparing a monthly financial report
- – Recording all accounts payable and receivables, any assets that was purchased and its depreciation (if any) and all payments and funds received
For any companies planning to operate in Qatar and benefit from its low corporate tax of 10%, proper tax filing is a must. It is required for every company, local or foreign to submit an annual financial statement that complies with the IFRS and the regulations of the Ministry of Economy and Commerce.
A company that has foreign ownerships (even partially) that gets its income from within Qatar is taxable by Qatari authorities.
There are various deductibles that can be applied for instance,
- – certain charitable contributions (up to 5% of net profit on the year the deduction is claimed)
- – Expenses that are borne to generate income
- – Employee costs
- – Losses that was incurred from sales of assets, rents and insurance premiums
- -Bad debts ( with prior approval from the Tax Authority)
To gain a clear view of the financial health and to project the future path of a company, a proper financial report must be made available. It is recommended that such reports include:
- – A balance sheet and expenses schedules
- – An income statement
- – A general ledger listing
- – Bank statement
- – Petty cash report
Having an extensive financial report will function as a “check and balance” to the company’s business plan. A proper valuation and feasibility study could, in addition, be done to alter the company’s trajectory towards better profit.
Certification and Auditing
An audited financial statement is required to be attached with the Company Income Tax returns if the company capital and profit exceeds QAR 100,000 and/or the head office is outside of Qatar.
A registered accountant with the Ministry of Finance must certify the tax declaration (denominated in QAR for all documents) of a company, to prevent rejection by the Qatar Tax Department (QTD).
In addition to the above matters, particular attention must be given to the
Accounting Rules and Regulations in the State of Qatar. It is as follows:
- – A Tax Year is the same as a calendar year and the first accounting period must be more or less than 12 months , although must never be less than 6 months and more than 18 months.
- – All listed companies must make available a consolidated and separate financial statements that adheres to internationally accepted accounting principles (This has been defined as the IFRS) As required by the Commercial Law No. 5 of 2002
- – The above report must be prepared annually and must be attached with a cash flow statement, a profit and loss account and also the balance sheet.
- – At the end of the accounting period, all companies have up to four months to submit their tax declarations. The Qatari Tax Department has the discretion to extend it ( Only for a maximum of another four months)
- – For a 10 year period, it is required by Qatari law that all accounting books, registers, and documents relating to activity in Qatar, remain in Qatar.
- – Public shareholding companies are to submit their financial statements as required by The Commercial Companies’ Law 11/2015. It must be compliant to the IFRS and International Accounting Standard (IAS) and to be submitted to the Ministry of Economy and Commerce. Financial statements of publicly listed companies must also be published at least 15 days before any annual general meeting (AGM) in the company’s website and in two local newspapers (in Arabic and English)
- – It is required that all companies to update and maintain their accounting records (including PSC, LLC and LPC), according to the standards set by the International Accounting Standards Board (IASB).
The rules and regulations for businesses in Qatar are straightforward and friendly and it is even easier with the myriad of accounting services for hire in Qatar. It must be noted, that outsourcing the accounting matters to an external account services company is not only going to save costs on employee training but will allow the business to focus on generating profit and expansion. In addition to that, the wealth of experience from the many certified public accountants becomes available to the budding company.
All in all, Qatar is an ideal place to start a business especially for a company that wants to have a presence and grab the abundance of opportunities in the Middle East.