The International Monetary Fund (IMF) recently published the preliminary findings of its 2018 official visit to Qatar. The Staff Concluding Statement, which is available on the IMF website, indicates that the Qatar Government's projections include the implementation of Value Added Tax (VAT) during the second half of 2018.

The introduction of VAT and excise tax is a fundamental shift in Qatar's fiscal policy aimed at significantly broadening the tax base and growing the sources of Government revenues, thereby reducing the reliance on the contribution of the hydrocarbon sector to the country's fiscal budget.

Qatar is a signatory of the Unified Gulf Cooperation Council (GCC) Agreements on VAT and excise tax. The Kingdom of Saudi Arabia and the United Arab Emirates have already introduced VAT with effect from 1 January 2018 in their respective jurisdictions. Qatar, along with the other three GCC countries,¹ will implement VAT by the end of 2018, in accordance with the GCC Agreement on VAT.

Next steps

Considering this short timeframe for implementation, it is anticipated that there will be developments in this regard in the near term. Businesses in Qatar should commence their VAT implementation projects at the earliest opportunity to mitigate the potential impact of penalties for noncompliance with VAT, and to ensure that their operations are structured in a VAT-efficient manner.

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ENDNOTE

¹ Bahrain, Kuwait and Oman.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Qatar), Doha

• Paul Karamanoukian, Qatar Managing Partner, MENA Tax Quality Leader
  paul.karamanoukian@qa.ey.com
• Finbarr Sexton, MENA Indirect Tax Leader
  finbarr.sexton@qa.ey.com
• Jennifer O'Sullivan, VAT
  jennifer.osullivan@qa.ey.com
• Marcel Kerkvliet, International and Transaction Tax Services
  marcel.kerkvliet@qa.ey.com
• Filip Van Driessche, VAT
  filip.vandriessche@qa.ey.com

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ATTACHMENT

PDF version of this Tax Alert