Qatar Zakat Guide 2026

Zakat vs Corporate Income Tax

Under Qatar's tax system, Qatari and GCC nationals are subject to Zakat rather than corporate income tax (CIT). The key distinction:

• Zakat: 2.5% on shareholders' equity — applies to companies wholly owned by Qatari/GCC nationals
• CIT: 10% on taxable profits — applies to companies with foreign ownership
• Mixed ownership: Zakat applies to the Qatari/GCC ownership portion; CIT applies to the foreign ownership portion

Example: A company has QAR 10 million in shareholders' equity, with 60% Qatari ownership and 40% foreign ownership. Zakat on 60% of equity: QAR 10M × 60% × 2.5% = QAR 150,000. CIT on 40% of taxable profit (assuming QAR 2M profit): QAR 2M × 40% × 10% = QAR 80,000. Total tax/zakat: QAR 230,000.

Zakat Base Calculation

The zakat base (amount on which 2.5% is calculated) is shareholders' equity as shown in the company's audited financial statements, adjusted for certain items:

• Included: Paid-up share capital, retained earnings, reserves, and other equity components
• Deducted: Net fixed assets (property, plant, and equipment) may be excluded if zakat on fixed assets is calculated separately at a lower rate
• Deducted: Accumulated losses (reduce the zakat base)
• Alternative method: Some companies calculate zakat on net current assets (current assets minus current liabilities) plus a portion of profits

The zakat base is essentially the net worth of the company attributable to Qatari/GCC shareholders. Companies can choose between the "equity method" and the "net current assets method" for calculating zakat, subject to GTA approval.

Zakat Filing & Payment

Zakat returns are filed annually with the General Tax Authority (GTA) through the Dhareeba portal, alongside the corporate tax return. The deadline is the same as for CIT: 120 days after the financial year-end (30 April for calendar-year companies). Payment is due at the time of filing. Late payment of zakat incurs penalties similar to late CIT payment: 1-2% per month on the outstanding amount.

Entities Exempt from Zakat

Certain entities are exempt from zakat obligations in Qatar:

• QFC entities: QFC-registered companies are not subject to zakat, even if Qatari-owned. They pay 10% CIT on QFC-sourced income.
• Free zone companies: QFZA entities are not subject to zakat during the 0% CIT holiday period.
• Petroleum companies: Subject to 35% petroleum CIT, no zakat obligation.
• Foreign-owned companies: Subject to CIT at 10%, no zakat obligation.
• Individuals: Zakat is a personal religious obligation for Muslim individuals, but it is not collected by the government. Voluntary payments are made to charitable organizations.

Disclosure & Verification

Companies subject to zakat must clearly disclose the ownership breakdown (Qatari/GCC vs foreign) in their financial statements and zakat computation. The GTA may request supporting documentation including the Commercial Register extract, shareholder register, and shareholding certificates. Incorrect disclosure of ownership percentages can result in penalties of up to QAR 25,000.

Zakat Planning Considerations

• For Qatari/GCC-owned companies, zakat at 2.5% of equity may be more or less than CIT at 10% of profits depending on the company's profitability and capital structure
• Companies with high equity but low profits may prefer CIT (if foreign ownership exists); companies with high profits relative to equity may prefer zakat
• QFC registration can provide an alternative framework that avoids zakat entirely
• Free zone status (QFZA) provides a 20-year holiday from both CIT and zakat