Middle East Legislative Insight: Qatar Excise Tax Law

Businesses that import, produce or store excise goods such as tobacco, alcohol and energy drinks in Qatar must now account for excise tax, take commercial decisions on how they will adjust their pricing structures and be ready to file the tax return when required.

Qatar Law No. 25/2018 on Selective Tax was signed on 13 December 2018 by Sheikh Tamim bin Hamad (Emir of Qatar) and has been in force since 1 January 2019. Qatar Law No. 25/2018 has offered some exemptions from excise tax but under certain conditions. Qatar's excise tax introduction follows the implementation of the tax by the United Arab Emirates, the Kingdom of Saudi Arabia and Bahrain, and included special purpose goods.

Similar to the other Gulf Cooperation Council (GCC) countries, the businesses that import, produce or store "health-damaging" or "special purpose" goods such as tobacco, alcohol and energy drinks in Qatar must now account for excise tax and file a transitional tax return if applicable.

It is highly anticipated that Qatar will implement other types of the indirect taxes which will contribute to the Qatar National Vision 2030 by creating new sustainable sources of income to be invested in and which will have long-term economic growth.

The recent adoption of international best practices in taxation will assist the government in Qatar to have different sources of non-hydrocarbon dependent income, which will promote economic growth and achieve financial stability. The new resources will most likely assist the government in maintaining a high standard of living of a modern society and ensure availability of funds for public services.

Before going over the key points to understand excise tax in Qatar, it is worth noting that late last year the country also agreed to establish the General Tax Authority (GTA), which replaces the Qatar Tax Department (QTD), under the supervision of the Minister of Finance. The GTA will oversee all tax and related laws and improve tax compliance. Qatar Emiri Decision No. 77/2018 on the Establishment of the General Tax Authority was released on 13 December 2018 to establish the mandate and function of the GTA.

Background

The implementation of the excise tax had a significant effect on all businesses that import, manufacture or trade excise goods in Qatar especially for special purpose goods. Business entities that import, produce or store excise goods such as tobacco, alcohol and energy drinks in Qatar must now account for excise tax, take...