Qatar, in line with global efforts to increase tax transparency and prevent tax avoidance, has adopted Country-by-Country Reporting (CbCR) requirements under the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 initiative. These regulations mandate large multinational enterprises (MNEs) to disclose detailed financial and tax-related information on a country-by-country basis. This guide provides CFOs and financial executives with an overview of CbCR obligations in Qatar, including the criteria for reporting, submission requirements, penalties for non-compliance, and additional resources to ensure compliance with the law.

Applicability of CbCR in Qatar

Criteria for Reporting:

• CbCR is applicable to multinational groups with consolidated annual revenues of at least QAR 3 billion (approximately €750 million) in the preceding fiscal year.
• The CbC report must be filed by the ultimate parent entity of the MNE group if it is a tax resident in Qatar.
• In cases where the ultimate parent entity is not based in Qatar, but a subsidiary or constituent entity within the group operates in Qatar, the Qatari entity may need to file a report if the parent’s jurisdiction does not meet CbCR obligations or does not exchange information with Qatar.

Relevant Legislation:

• Qatar introduced CbCR requirements through the Income Tax Law No. 24 of 2018 and Ministerial Decision No. 21 of 2019, which enforce the OECD’s BEPS Action 13 framework in Qatar. These regulations outline the CbCR obligations for multinational enterprises operating in Qatar.

Reporting Requirements

Information to be Reported:

• The CbC report must provide the following financial and operational information for each tax jurisdiction in which the MNE group operates:
  • Total revenue (segregated into related-party and unrelated-party revenues)
  • Profit or loss before income tax
  • Income tax paid and accrued
  • Stated capital and accumulated earnings
  • Number of employees
  • Tangible assets (excluding cash or cash equivalents)
• The report must also list all constituent entities within the MNE group, providing their tax residency and detailing their main business activities.

Form and Submission:

• The CbC report must be prepared in the OECD XML format for consistency with global standards.
• The report is filed electronically through Qatar’s General Tax Authority (GTA), which oversees the submission and compliance of CbCR in Qatar.
  • More details on the submission process are available on the General Tax Authority (GTA) website.

Filing Deadlines

• The CbC report must be submitted within 12 months of the end of the multinational group’s fiscal year. For instance, if the fiscal year ends on 31 December 2023, the CbC report must be filed by 31 December 2024.
• Additionally, all constituent entities in Qatar must notify the General Tax Authority (GTA) about their CbCR obligations and whether they are the ultimate parent entity or the reporting entity for the group. This notification should be made no later than the last day of the reporting fiscal year.

Penalties for Non-Compliance

Penalties:

• Non-compliance with the CbCR obligations in Qatar may lead to significant penalties:
  • Failure to file the CbC report or delays in filing can result in fines of up to QAR 500,000.
  • Filing incorrect or incomplete reports can also result in financial penalties, with additional sanctions possible depending on the severity of the error.
  • Failure to submit the notification or providing inaccurate information can lead to further fines.

Defences:

• MNEs may present evidence of reasonable cause for any delays or inaccuracies, such as unforeseen technical issues. However, any leniency is granted at the discretion of the General Tax Authority (GTA), so it is crucial for businesses to ensure timely and accurate filings to avoid penalties.

Confidentiality and Use of Information

Data Protection:

• The information provided in the CbC report is treated with strict confidentiality by the General Tax Authority (GTA). The data is used primarily for high-level transfer pricing risk assessment and to identify potential base erosion and profit shifting (BEPS) risks.
• Qatar is a signatory to the Multilateral Competent Authority Agreement (MCAA), which allows for the automatic exchange of CbC reports with other jurisdictions, provided those jurisdictions maintain equivalent confidentiality standards as set by the OECD.