Qatar and Kuwait are the only two GCC states with no VAT in force as of October 2026, but that does not make a small business there tax-free. In Qatar, profits attributable to foreign (non-GCC) owners are taxed at 10%, wholly Qatari or GCC-owned companies are exempt but must still file a return through the General Tax Authority's Dhareeba portal, and the return is due four months after the year end. In Kuwait, foreign corporate bodies doing business in the country pay 15% on their Kuwaiti profits, Kuwaiti shareholding companies pay 1% Zakat (and 2.5% National Labour Support Tax if listed), and the tax declaration is due three months and 15 days after the year end. Both countries apply a 15% Domestic Minimum Top-up Tax from 2025, but only to multinational groups with revenue of EUR 750 million or more. This guide covers who pays what, deadlines, withholding, records and invoicing in QAR and KWD. It is general information, not tax advice; confirm your own position with the GTA, Kuwait's Ministry of Finance or a licensed adviser.
Is there VAT in Qatar or Kuwait in 2026?
No. Both countries signed the GCC VAT Framework Agreement, but neither has passed a national VAT law. As of October 2026:
- Qatar has no VAT law, no VAT registration and no VAT on invoices. The closest step is e-invoicing: on 6 May 2026 the Council of Ministers approved a draft e-invoicing law and its implementing regulations, prepared by the Ministry of Finance with the GTA. It still has to pass through the Shura Council and be issued by the Amir, and no model, threshold or start date has been published. Some advisers read it as groundwork for a future VAT, often at 5%, but that is a projection, not an announcement.
- Kuwait is further away. Advisers report that VAT is not part of the government's current development plan, and the tax agenda has focused on the minimum top-up tax and a proposed business profits tax instead.
Status check: Any website quoting a VAT start date for Qatar or Kuwait is guessing. Until a law is published in the Official Gazette, do not add VAT to your invoices in either country.
Qatar does levy excise tax (since 2019) on tobacco, energy drinks, sugary drinks and similar goods. Kuwait has no excise tax in force.
How do the six GCC states compare on VAT and corporate tax?
| Country | VAT | Corporate tax for a typical small business | Minimum top-up tax (large groups only) |
|---|---|---|---|
| UAE | 5% | 9% on taxable income above AED 375,000; 0% below | 15% DMTT from 2025 |
| Saudi Arabia | 15% | 20% income tax on the non-Saudi/non-GCC share; 2.5% Zakat on the Saudi/GCC share | Check current ZATCA guidance |
| Bahrain | 10% | No general corporate income tax; a draft 10% law is under review | 15% DMTT from 2025 |
| Oman | 5% | 15%, with a lower 3% rate for qualifying small businesses | Check current Oman Tax Authority guidance |
| Qatar | None | 10% on the foreign-owned share of profits; Qatari/GCC-owned share exempt | 15% DMTT and IIR from 2025 |
| Kuwait | None | 15% on foreign corporate bodies; 1% Zakat for Kuwaiti shareholding companies | 15% DMTT from 2025 |
The Oman small-business conditions (revenue, capital and headcount limits) have changed over time and sources disagree on the current figures, so check them with the Oman Tax Authority. For VAT in the neighbours, see our guides to Bahrain VAT and Oman VAT and Fawtara e-invoicing.
Who pays corporate income tax in Qatar?
Qatar's Income Tax Law (Law No. 24 of 2018) taxes business profits at a flat 10%. The key word is ownership:
| Owner of the company | Income tax position |
|---|---|
| Qatari nationals | Exempt on their share |
| GCC nationals resident in Qatar | Exempt on their share |
| Foreign (non-GCC) individuals or companies | Taxed at 10% on their share of profits |
| Foreign company operating through a branch or permanent establishment | Taxed at 10% on Qatari-source profits |
For a mixed-ownership company, the tax follows the profit share the foreign partner is entitled to under the articles of association, not just the share capital. A company that is 100% foreign-owned (allowed in many sectors since Law No. 1 of 2019) pays 10% on all its taxable profit.
Exempt companies still file
A wholly Qatari or GCC-owned company owes no income tax, but it must still register, hold a tax card and file an annual return on Dhareeba. GTA circulars issued in 2021 let smaller exempt companies file a simplified return, and require a full return with audited financial statements once capital reaches QAR 1 million or annual turnover reaches QAR 5 million. Check the current circular before relying on those thresholds.
When are audited accounts required for taxable companies?
PwC's Worldwide Tax Summaries (reviewed September 2026) list three triggers. Audited financial statements must accompany the return if:
- the company's capital exceeds QAR 200,000,
- its total income exceeds QAR 500,000, or
- its head office is outside Qatar.
Below all three, the return can be filed without an audit, but you still need proper books to prepare it.
When is the Qatar tax return due, and what are the penalties?
Deadline: The income tax return and any tax due are filed and paid on Dhareeba within four months of the end of the accounting period. For a 31 December year end, that is 30 April.
| Failure | Penalty (as reported by EY, KPMG and Forvis Mazars) |
|---|---|
| Late tax return | QAR 500 per day, capped at QAR 180,000 |
| Late payment of tax | 2% of the unpaid tax per month or part of a month, capped at the tax due |
The late-filing penalty applies to exempt companies too. With a GTA-approved non-calendar year end, the four months run from that date.
How does withholding tax work in Qatar?
When a business in Qatar pays a non-resident that has no permanent establishment in Qatar, it may have to withhold tax and pay it to the GTA:
| Payment to a non-resident | Domestic WHT rate |
|---|---|
| Services used or benefited from in Qatar, even if performed abroad | 5% |
| Royalties and technical fees | 5% |
| Interest | 5% (with exemptions, for example certain bank interest) |
| Dividends | Not subject to WHT |
Deadline: Withheld tax is paid to the GTA, with a monthly statement on Dhareeba, by the 16th day of the following month.
Tax treaties can reduce the rate, sometimes to 0%. Since 16 March 2026, Council of Ministers' Decision No. 4 of 2026 lets payers apply treaty rates directly at the time of payment, subject to GTA conditions.
A worked example: a Doha consultancy's tax and WHT
A Doha consultancy is 60% owned by a Qatari national and 40% by a foreign partner, and the articles give the foreign partner 40% of the profits. For 2026 its audited accounts show a net profit of QAR 850,000, and it adds back QAR 50,000 of non-deductible expenses.
| Line | QAR |
|---|---|
| Net profit per audited accounts | 850,000 |
| Add: non-deductible expenses | 50,000 |
| Taxable profit | 900,000 |
| Foreign partner's share (40%) | 360,000 |
| Income tax at 10% | 36,000 |
Check: 850,000 + 50,000 = 900,000. 900,000 × 40% = 360,000. 360,000 × 10% = 36,000. The return and the QAR 36,000 are due by 30 April 2027.
| Journal at year end | Debit (QAR) | Credit (QAR) |
|---|---|---|
| Income tax expense | 36,000 | |
| Income tax payable | 36,000 |
In March 2026 the same consultancy paid a UK designer with no presence in Qatar QAR 20,000 for work used in a Doha project. It withholds 5%, pays the designer QAR 19,000 and pays QAR 1,000 to the GTA by 16 April 2026.
| Journal on payment | Debit (QAR) | Credit (QAR) |
|---|---|---|
| Design services (expense) | 20,000 | |
| Bank | 19,000 | |
| Withholding tax payable | 1,000 |
Both journals balance: 36,000 = 36,000, and 20,000 = 19,000 + 1,000. The contract should say whether the agreed fee is gross or net of WHT, or you may end up paying the 5% yourself.
Who pays tax in Kuwait?
Kuwait's system is a set of separate levies, each with its own scope. Most small Kuwaiti-owned WLL companies fall outside all of them, which is why many owners assume Kuwait has no business tax.
| Levy | Who pays | Rate |
|---|---|---|
| Corporate income tax | Foreign corporate bodies doing business in Kuwait, directly or through an agent; GCC companies to the extent of foreign ownership | 15% of taxable profit |
| Zakat (Law No. 46 of 2006) | Kuwaiti shareholding companies, listed and closed | 1% of net profit |
| National Labour Support Tax (Law No. 19 of 2000) | Kuwaiti companies listed on Boursa Kuwait | 2.5% of net profit |
| KFAS contribution | Kuwaiti shareholding companies | 1% of net profit (on an adjusted base) |
| Domestic Minimum Top-up Tax (Decree-Law No. 157 of 2024) | Kuwaiti entities of multinational groups with revenue of EUR 750 million or more in two of the four preceding years | Top-up to a 15% effective rate |
Companies wholly owned by Kuwaiti or other GCC nationals pay no corporate income tax. The base for Zakat, NLST and KFAS is net profit with statutory adjustments, so a closed shareholding company with KWD 250,000 of net profit would pay roughly KWD 2,500 in Zakat before those adjustments.
What the DMTT changed
Decree-Law No. 157 of 2024 (issued 31 December 2024, Executive Regulations in Ministerial Resolution No. 55 of 2025) applies to fiscal years starting on or after 1 January 2025. For groups in scope it replaces the 15% corporate income tax, Zakat, NLST and KFAS contribution. If your group's consolidated revenue is below EUR 750 million, nothing changed for you.
The proposed Business Profits Tax
Kuwait has drafted a Business Profits Tax law that would apply 15% to a much wider base of domestic and foreign businesses, with businesses below about KWD 1.5 million of annual revenue reported as excluded and a broader start reported for 1 January 2027. As of October 2026 we found no official confirmation that it has been enacted, and advisers disagree on its status. Treat it as a planning risk, not current law, and check the Official Gazette (Kuwait Al-Youm) before acting on any article that says it applies.
When is the Kuwait tax declaration due?
Deadline: A foreign company's tax declaration is due within three months and 15 days of the end of its tax period, so 15 April for a 31 December year end. An extension of up to 60 days may be granted.
Kuwait tax can be paid in four equal instalments, on the 15th day of the 4th, 6th, 9th and 12th months after the period ends. If an extension is granted, the whole amount is due when it expires. The declaration must be supported by an audited balance sheet and profit and loss account. Late filing or payment costs 1% of the tax for every 30 days of delay or part thereof.
Example: a foreign company's Kuwait branch has taxable profit of KWD 84,250.000. Tax at 15% is KWD 12,637.500, payable in four instalments of KWD 3,159.375 on 15 April, 15 June, 15 September and 15 December. Each 30 days of late filing would add KWD 126.375 (1% of 12,637.500).
Check: 84,250.000 × 15% = 12,637.500. 12,637.500 ÷ 4 = 3,159.375. 12,637.500 × 1% = 126.375.
The 5% retention
Kuwait has no general withholding tax, but a Kuwaiti entity contracting with a supplier or subcontractor must hold back 5% of the contract value (advisers differ on whether from each payment or the final payment) until the supplier produces a tax clearance certificate from the Ministry of Finance. Release it early and you can become liable for the supplier's unpaid tax. For the supplier, that 5% is cash it only sees once its tax affairs are in order.
What records do you need to keep?
| Qatar | Kuwait | |
|---|---|---|
| Retention period | 10 years, kept in Qatar | No single period in the tax law; the statute of limitations is 5 years, so keep records at least that long (longer is safer) |
| Audited accounts | Above QAR 200,000 capital or QAR 500,000 income, or a foreign head office (taxable companies) | Required to support a foreign company's declaration |
| Currency of the books | QAR | KWD |
| Portal | Dhareeba (GTA) | Ministry of Finance tax department |
Both expect the same core set: general ledger, sales and purchase invoices, bank statements, contracts, payroll records, the fixed asset register and the working papers behind each return.
What does a small business in Doha or Kuwait City still need without VAT?
No VAT removes the quarterly return, not the bookkeeping. Without one forcing a reconciliation every quarter, books drift until the auditor catches it. A short list for both countries:
- Books in the local currency. The tax return and audited accounts are in QAR or KWD. Record foreign-currency invoices in the original currency and convert at the transaction date. The riyal is pegged at QAR 3.64 per US dollar; the dinar is managed against a basket of currencies, so KWD rates move and each transaction needs its own rate.
- Invoices with a clean sequence. No tax invoice rules apply without VAT, but auditors, banks and the 5% retention process rely on numbered invoices with your commercial registration details, the customer, a description, the amount and the currency. If Qatar's e-invoicing law is enacted, a gap-free sequence and complete customer records come first.
- Three decimals for KWD. The dinar divides into 1,000 fils, and amounts are quoted to three decimals. Two lines of KWD 437.250 and KWD 1,212.125 total KWD 1,649.375; rounded to two decimals that becomes 1,649.38, which is 5 fils off. The riyal has two decimals (100 dirhams), so QAR invoices have no such issue.
- An ownership record. In Qatar, the tax depends on the foreign profit share. Keep the articles of association and any change in ownership dated, because a mid-year change splits the year.
- A WHT and retention schedule. Track payments to non-residents (Qatar) and retentions held or suffered (Kuwait).
- A chart of accounts with the tax lines. Income tax expense and payable, Zakat payable where relevant, withholding tax payable and retentions receivable. Our chart of accounts guide is written for the UAE, but the structure carries over: drop the VAT accounts and add these.
From the platform: In Staks, QAR and KWD are both selectable currencies, and an organisation set up in Qatar or Kuwait gets that country's currency as its primary currency. Invoices, quotes, bills and expenses can be issued in any supported currency and convert into your primary currency at the rate for each document's date, with both figures kept on record. Tax rates are ones you create, so an invoice can carry no tax at all. Invoices are unlimited from Starter at $19 a month; the double-entry ledger, where you can add accounts such as income tax payable or withholding tax payable and post manual journals, is on Growth at $49. The limits, stated plainly: documents print amounts to two decimal places, so KWD invoices do not show the third (fils) decimal, and you should check KWD totals yourself or price in 10-fils steps. Staks does not file returns on Dhareeba or with Kuwait's Ministry of Finance, calculates no income tax, Zakat or WHT for you, and has no Arabic interface.
Frequently asked questions
Do I pay corporate tax if my Qatar company is 100% Qatari-owned?
No income tax, as long as all the owners are Qatari nationals or GCC nationals resident in Qatar. You must still register with the GTA, hold a tax card and file an annual return on Dhareeba within four months of the year end, or face the QAR 500 a day late-filing penalty.
Does a small Kuwaiti WLL owned by Kuwaitis pay any tax?
Under the current rules, generally no. Corporate income tax applies to foreign corporate bodies, and Zakat, NLST and KFAS apply to shareholding companies, not WLLs. That could change if the proposed Business Profits Tax is enacted, though businesses below about KWD 1.5 million of revenue are reported to be excluded.
Will Qatar or Kuwait introduce VAT soon?
Neither has announced a date. Qatar's draft e-invoicing law, approved by the cabinet on 6 May 2026, is the step most often linked to a future VAT, but it is not yet in force. Kuwait has not included VAT in its current plan.
Related reading
- VAT in Bahrain for small businesses
- Oman VAT and Fawtara e-invoicing for small businesses
- Chart of accounts for a UAE small business
- FX gains and losses for Gulf small businesses
Keep your books in QAR or KWD, file your Qatar return within four months or your Kuwait declaration within three months and 15 days, and track WHT and retentions as you pay. Start a 14-day free trial of Staks to invoice and keep a double-entry ledger in QAR, KWD, USD and the other Gulf currencies.