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Qatar Guide: When will VAT be implemented in Qatar?

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When will VAT be implemented in Qatar

Members of the Gulf Cooperation Council (GCC) agreed on the introduction of VAT in their respective economies and signed a VAT Framework Treaty. This treaty formulates the basis of VAT legislation and principles to be followed by each Members State with few exceptions regarding the VAT treatment of certain supplies. Out of the six countries included in GCC, the kingdom of Saudi Arabia, United Arab Emirates, and Bahrain has successfully implemented VAT. The rest of the three countries, Oman, Katar, and Kuwait are in the process of planning and executing.

It is expected that Qatar will implement VAT in late 2021 or early 2022 depending on the stability and strength of the domestic economy, trade, employment, fiscal policy, revenue streams, and other factors. Following are the expected features of the eventual Qatari regime:

  • New VAT law and Executive Regulations
  • Registration threshold of QAR364,000
  • VAT rates of 5%
  • Imports subject to new VAT Law
  • Exemptions for financial, educational, and health services
  • Monthly and Quarterly VAT reporting

The Qatar government is busy drafting the VAT regulatory legislative in cooperation with the

independent financial zone authorities. According to the Association of Chartered Certified Accountants and law firm Al Tamimi and Company, Qatar’s General Tax Authority (GTA) is also undergoing the required preparations regarding the introduction of the state’s new tax administration system, Dhareeba.

Impact of VAT on Qatar Economy

According to experts and analysts, the early impact of imposing VAT in Qatar will be negative due to a rise in the inflation rate which will eventually affect the spending behavior of consumers. Business entities will also take time to modify their businesses and financial statements according to the new VAT rate. It is worth mentioning here, that companies need to contact a professional firm to assist in incorporating VAT in business accounts and transactions. Aviaan Accounting has experience in providing VAT service across GCC through its trained and certified staff.

However, the long-term impact of VAT on Qatar’s economy and consumers will be positive because business entities will engage in competitive pricing and offer diverse products to encourage customer spending and gain a competitive advantage.

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