Qatar’s General Tax Authority (“GTA”) has announced the commencement of the implementation of Chapter Seven (as repealed and re-enacted) of the Income Tax Law issued under Law No. 24 of 2018, as amended. The revised chapter establishes the legal framework for the application of both the Global Minimum Tax and the Domestic Minimum Tax in the State of Qatar.
The tax implementation is part of Qatar’s continued commitment to aligning its domestic tax framework with evolving international standards and best practices. In particular, the amendments give effect to Pillar Two of the global tax reform initiative spearheaded by the Organization for Economic Co-operation and Development (“OECD”) and endorsed by the Group of Twenty (“G20”). Pillar Two, commonly referred to as the Global Minimum Tax Agreement, is designed to address tax challenges arising from the digitalisation and globalisation of the modern economy.
Under the new framework, multinational enterprise groups with consolidated annual revenues exceeding €750 million and operating across multiple jurisdictions will be subject to a minimum effective tax rate of 15% on their profits. The rules are intended to ensure that large multinational groups pay a baseline level of taxation in every jurisdiction in which they operate, thereby reducing incentives for profit shifting to low-tax jurisdictions.
The re-enacted Chapter Seven introduces two core mechanisms central to the Pillar Two framework:
- The Global Minimum Tax, implemented through the Qualified Income Inclusion Rule, which enables the parent jurisdiction to impose a top-up tax where constituent entities within the group are taxed below the 15% minimum rate; and
- The Domestic Minimum Tax, implemented through the Qualified Domestic Minimum Top-up Tax, which allows Qatar to collect top-up tax locally in respect of low-taxed profits arising within its jurisdiction, thereby preserving domestic taxing rights.
Through these measures, Qatar reinforces its position within the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting. The implementation seeks to safeguard the national tax base, mitigate risks associated with base erosion and profit shifting, and prevent the diversion of taxable profits to jurisdictions offering preferential or low-tax environments.
The introduction of these rules reflects a broader strategic objective to enhance transparency, promote tax fairness, and maintain Qatar’s competitiveness while ensuring compliance with internationally agreed standards.
