GTL Summary:

Cabinet Decision No. 39 of 2019, Article 2, clarifies tax exemptions under Qatar Income Tax Law 24 of 2018. It details treatments for interest on public debt, capital gains from revaluation, and specific conditions for maritime and air navigation companies. Key provisions include the requirement for substantial activity for specific exemptions and the criteria for resident legal persons owned by Qataris or GCC nationals. Additionally, it defines the average number of workers calculation and specifies that industrial activities related to agriculture or fishing remain taxable unless otherwise exempted.

Document Type: ERS - Executive Regulations
Law: Income Tax Law 24 of 2018
Decision Number: executive-regulations-39-article-2
Year: 2019
Country: 🇶🇦 Qatar
Official Name: Article 2
Last updated at: 2026-02-23 12:13:40 UTC

SECTION 1 - SCOPE OF TAX

Chapter 2 - Tax Exemptions

Article 2
[2]

  1. The term "interest and banking returns" specified in [Article 4(2)][G2] of the Law includes income earned by an individual from savings accounts, deposit accounts, and other investment tools at banks, including Islamic banks.

  2. The term "interest and returns on public debt instruments, Islamic securities, and bonds issued by public entities and institutions" specified in [Article 4(3)][G3] of the Law includes profits from the disposal of these securities and bonds.

  3. In applying the provisions of [Article 4(4)][G4] of the Law, "real estate and securities belonging to the assets of a taxable activity" refers to those assets related to the taxable activity conducted by the taxpayer. This includes securities, shares, and bonds of Qatari joint-stock companies, any other licensed tradable securities, other investment instruments, and equivalents according to applicable legislation.

  4. For the purposes of Article 4(5)[G5] of the Law, if any of the conditions specified in that Clause are violated, the capital gains arising from the revaluation of company assets are subject to tax starting from the year of exemption utilization.

  5. [For the purposes of applying the provisions of Article 4(6) & (7) of the Law, the following conditions must be met:

    1. The project must pay tax abroad on capital gains or directors' fees and similar payments.

    2. The project must meet, as applicable, the substantial activity requirements specified in the Law, the implementing decisions, and these Regulations.][G6]

  6. The exemption specified in [Article 4(8)][G7] of the Law includes the surplus distributed by the liquidator to partners after settling the company's debts and returning the cash value of their capital shares, considering the provisions of sub-clauses (A) and (B) of the referred clause.

  7. The term "machines" specified in [Article 4(9)][G8] of the Law refers to tools and equipment used to obtain the final product. It does not include small and handheld tools used to facilitate or complete a craftsman's work. The average number of workers during the tax year is calculated by multiplying the number of workers by the number of days the number was available and dividing the result by 360 days. Storage-only establishments are not considered when calculating the number of establishments through which the activity is conducted.

  8. The exemption specified in Article 4(10)[G9] of the Law applies to gross income from agricultural and marine fishing activities and does not apply to any industrial or commercial activity complementary to or related to these activities.

  9. For the purposes of applying [Article 4(11)][G10] of the Law, income earned by a resident air or sea navigation company in another state from operating aircraft or ships in international transport is exempted from income tax to the extent that a Qatari navigation company is exempted in that state from tax on income from operating aircraft or ships, based on a certificate issued by the tax authorities of that state or a mutual exemption agreement.

  10. The exemption specified in [Article 4(13)][G11] of the Law is granted on the condition that:

    1. The legal person is resident in the state.

    2. The legal person maintains accounting records in accordance with the accounting standards applied in the state.

    3. The Qataris are residents of the state.

    4. The Qataris are the beneficial owners of the legal person.

    5. The Qataris own the entire capital throughout the accounting period in which the exempt income is earned.

  11. The exemption specified in [Article 4(4) and (14)][G12] of the Law is granted on the condition that the persons are residents in the state.

  12. The exemption specified in [Article 4(14)][G13] of the Law is granted on the following conditions:

    1. The qualifying legal person and the legal persons mentioned in Clauses (B) and (C) of [Article 4(14)][G13] of the Law must maintain accounting records in accordance with the accounting standards applied in the state.

    2. The persons owning the exempt profit shares must be residents of the state and must have owned them throughout the accounting period in which the exempt income is earned.

    3. The natural Qatari persons must be direct owners and beneficiaries of the legal person mentioned in Clauses (B) and (C) of [Article 4(14)][G13] of the Law.

  13. For the purposes of [Article 4(16)][G14] of the Law, the exemption concerning the non-Qatari investor's share does not apply to their share of profits from companies owned by the company whose shares are publicly traded in the state's financial market.

  14. Nationals of the Gulf Cooperation Council (GCC) states are subject to the same exemptions and conditions applicable to Qatari nationals under Article 4 of the Law and Law No. 9 of 1989 regarding the equality of GCC citizens in tax treatment.

Footnotes

[2]Amended by Cabinet Decision No. 3 of 2023

GTL Notes

[G2]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(1)"

[G3]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(2)"

[G4]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(3)"

[G5]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(4)"

[G6]This paragraph was inserted vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. There has also been a consequential amendment of numbering for all succeeding paragraphs.

[G7]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(5)"

[G8]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(6)"

[G9]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(7)"

We believe that the correct reference is Article 4(11) of the Law.

[G10]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(8)"

We believe that the correct reference is Article 4(12) of the Law.

[G11]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(11)"

We believe that the correct reference is Article 4(14) of the Law.

[G12]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(10)"

We believe that the correct reference is Article 4(15) of the Law.

[G13]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(11)"

We believe that the correct reference is Article 4(15) of the Law.

[G14]This paragraph was amended, vide Amending Law No. 11 of 2022 and and Cabinet Resolution No. 3 of 2023. Prior to its amendment, the text in brackets read as "Article 4(13)"

We believe that the correct reference is Article 4(17) of the Law.

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