Qatar: VAT and the retail sector | KPMG | QA
close
Share with your friends

Qatar: Possible considerations, VAT and the retail sector

Qatar: VAT and the retail sector

Under the Gulf Cooperation Council’s framework, Qatar is expected to introduce a value added tax (VAT) regime in 2019, with the standard VAT rate to be 5%.

1000

Related content

All businesses in Qatar would be affected by the introduction of a VAT regime; however, the retail sector could be even more affected. A number of factors of a VAT system that need to be considered with respect to a retailer’s operations in Qatar concern:

  • Shelf prices (i.e., the advertised shelf price of an item would need to include VAT so that customers would be aware of the total price)
  • Simplified invoices (retailers would have to issue tax invoices to their customers on sales of taxable goods)
  • Consignment sales (under a consignment agreement, a retail business is able to return any unsold goods to the initial supplier without having to account for VAT)
  • Returning goods (i.e., customers returning items to a retailer or in instances when goods are damaged or lost during delivery; the retailer is able to adjust the original value of the supply so that input VAT would only be recovered for the complete or undamaged items returned)
  • Product bundling (i.e., the correct treatment for supplies sold within the same transaction but individually would be subject to different VAT rates)
  • Payments using loyalty cards—the tax treatment can be complex when using “loyalty points” to pay, or partially pay, for an item because no monetary payment or partial payment is made.
  • Gifts and samples (VAT would be applied at a standard rate when businesses supply free gifts or samples of significant value)
  • Gift vouchers (whether VAT would be applied on the voucher sale date, or the redemption date to provide for consistent VAT treatment)
  • Sale of second-hand goods (output VAT on the difference between the price paid for the item and the price for which the item is sold) 
  • VAT refunds for tourists (tourists permitted to recover VAT paid when purchasing goods outside of their home country)

 

Read an October 2018 report [PDF 1 MB] prepared by the KPMG member firm in Qatar

© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit