Sajid Khan, Partner at PwC, speaking during a tax seminar organised by PwC at the W Doha Hotel in Doha recently. Pic: Abdul Basit/ The Peninsula
Doha: Rapid developments in the global tax system, which cascade down to the domestic tax landscape, are a major challenge for businesses in Qatar. The country, which is a signatory to the OECD/G20 Inclusive Framework on Base erosion and profit sharing (OECD BEPS), has to introduce changes in the global tax system into its domestic laws, officials from PwC noted during a seminar on taxation in Doha, recently.
The establishment of the General Tax Authority (GTA) in January 2019 as a semi-autonomous body is a major change in the country’s tax landscape, and a sign that Qatar wants to transform the way it deals with taxes domestically in a way that it also meets its international tax obligation in a more effective and efficient manner, said Sajid Khan, Partner at PwC while talking to The Peninsula on the sidelines of the event.
“The GTA formation itself is a sign that Qatar wants to transform the way it deals with taxes domestically in a way that it can also meet its international tax obligation in a more effective and efficient manner. And partly, it’s also to have an alternative system in terms of its diversification agenda,” he added.
The introduction of the new executive regulations in December 2019, as well as the issuance of the new income tax law and excise taxation are some of the other major changes in the country’s tax system.
The global consulting firm also saw increased activity focused on capital gains taxation, related party transactions and audits, and withholding taxes and compliance in the country, Khan added.
According to Mark Schofield, Middle East Tax & Legal Services Leader at PwC, tax systems in the region are changing faster than anywhere else in the world. He said: “There has been a huge amount of change in the global tax landscape over the last few years. We see the Middle East region embracing that agenda and moving into being a part of the international tax established framework. We’re seeing changes happening here faster than anywhere else in the world. And I think the challenge that happens in Qatari companies, as well as Middle Eastern companies is they have a very short window to get themselves in a position where they are able to comply or able to understand the impact of the rules, with the speed of the changes currently happening”.
Schofield added: “When introducing new rules, the challenge is to make sure that everybody understands and there is a common understanding of what the rule means both for the GTA and also for the company itself. And that’s the biggest challenge. A lot for businesses to do in a short period of time, because of the speed of which governments and tax authorities here are reacting to that changing agenda they want to be a part of”.
Speaking on the aspect of tax information reporting and data, Peter Maybrey, Partner for Tax & Legal Services at PwC, said, “Qatar is a keen supporter of international tax changes. In the financial sector, there is a lot of information and data that Qatar now has to provide under the common reporting standard regime, which is already enforced. And there are other series of new requirements that businesses have to meet, including reporting on their profits. And the way that businesses need to respond to that is to ensure they have the right governance and the right systems in place to meet these important requirements”.
