Transfer Pricing FAQs published by Qatar Tax Authority

Qatar's General Tax Authority (GTA) has released FAQs on Transfer Pricing declaration and master & local file and documentation to guide taxpayers comply with their first TP compliance.

I. Scope of the transfer pricing Declaration requirement

Scope of the reporting obligation under Article 56

• the annual tax-free turnover of the entities or the gross assets appearing on their balance sheet is greater than or equal to QAR10,000,000
• the entities are associated to other entities established in Qatar or abroad

II. Deadline and method of filing the transfer pricing declaration

The transfer pricing declaration must be filed with the income tax return.

III. Content of the transfer pricing declaration

Two categories of information must be declared: 

• general information on the group of related entities
• specific information on the reporting entity

IV. General information about the group of related entities

General description n is intended to identify the main activities of the group. The Master File and the Local File, the intangible assets to be mentioned in this part of the TP declaration must:-

• have a principal character for the group
• be connected to the reporting entity

The reporting entity must indicate the TP methodology(ies) used by the group.

V. Specific information on the reporting entity

• The reporting entity must disclose the aggregate amount of sales and purchases of goods and services, as well as acquisitions and disposals of assets, which it recorded for the reporting fiscal year when the aggregate amount of transactions exceeds QAR200,000. 
• In the case of mixed transactions the transfer pricing (TP) declaration should reflect the accounting method used.
• With regard to the transfer pricing (TP) methods used, the reporting entity should specify the main TP method that is applied to each reported transaction.

MASTER FILE AND LOCAL FILE

I. scope of the reporting obligation under Article 57

 Residents in Qatar must submit a master file and a local file when they meet the following conditions:

• the annual tax-free turnover  is greater than or equal to QAR50,000,000
• these entities are associated with other entities established abroad.

II. Master file

It requires multinational enterprises to provide the General Tax Authority with high-level information regarding their global business operations and transfer pricing policies in a master file.

III. local file

Detailed transactional TP documentation is provided in a local file.

IV. Documents useful for the General Tax Authority

Master file and local file require taxpayers to articulate consistent TP positions.

V. Objectives of master file and local file requirements 

• to ensure that taxpayers give appropriate consideration to transfer pricing.
• to provide the General Tax Authority with the information necessary.
• to provide the GTA with useful information to employ in conducting an appropriately thorough audit. 

VI. Are taxpayers required to assess their compliance with the arm’s length principle?

The documentation would be prepared at the time of the transaction, no later than the time of completing and filing the tax return.

VII.quality transfer pricing risk assessment

The GTA will use a variety of tools and sources of information for identifying and evaluating TP risks of taxpayers and transactions, including TP declaration.

VIII. Information to be provided in the master file

The master file should provide an overview of the multinational enterprise group. The master file must include lists of important agreements, intangibles and transactions, taxpayers should use prudent business judgment in determining the appropriate level of detail.

• the MNE group’s organizational structure
• a description of the MNE’s business or businesses
• the MNE’s intangibles
• the MNE’s intercompany financial activities
• the MNE’s financial and tax positions. 

IX.  Information to be provided in the local file

• The local file provides more detailed information relating to specific intercompany transactions. 

X. contemporaneous documentation

Where a taxpayer reasonably demonstrates that either no comparable data exists the taxpayer should not be required to incur costs in searching for such data.

XI. Timing for preparing the transfer pricing documentation 

A 30-day period is given to taxpayers to respond to specific General Tax Authority’s requests for documentation and other audit-related information requests.

XII. “Materiality

The transactions concerned are those between the enterprise that establishes the documentation and one or more associated enterprises and the amount of which, aggregated by category, exceeds QAR200,000 for the year.