Qatar Implements Global and Domestic Minimum Tax: Pillar Two Scope and Next Steps

Law No. 22 of 2024 amends Qatar’s Income Tax Law to implement the Qatar Domestic Minimum Top-up Tax (DMTT) under OECD Pillar Two, introducing the Income Inclusion Rule and a Domestic Minimum Top-up Tax effective for fiscal years beginning on or after January 1, 2025.

Qatar has begun operationalizing the OECD—G20 global minimum tax package through amendments to its Income Tax Law (Law No. 24 of 2018). The new chapter implements Pillar Two’s Global Anti-Base Erosion (GloBE) Model Rules, which apply a 15 percent minimum effective tax rate to in-scope multinational enterprise (MNE) groups.

Qatar’s approach centers on the Income Inclusion Rule (IIR) and a Domestic Minimum Top-up Tax (DMTT) intended to operate as a Qualified Domestic Minimum Top-up Tax (QDMTT). The rules apply to MNE groups of at least EUR 750 million in consolidated revenues (approximately US$890 million) and are effective for fiscal years starting on or after January 1, 2025.

For in-scope groups, the focus now shifts to readiness: confirming scope, building jurisdiction-by-jurisdiction effective tax rate models, and preparing finance and tax teams for new reporting, filing, and payment processes.

Implementation announcement and scope setting

Qatar’s General Tax Authority (GTA) announcement signals that Qatar has moved from adopting Pillar Two in legislation to operational implementation. It ties the reform to the OECD—G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), emphasizing transparency and the protection of national tax revenues from profit shifting to low-tax jurisdictions.

The announcement also notes that the GTA will issue guidance manuals and executive decisions to clarify implementation mechanisms. For in-scope groups, this is a practical inflection point: Pillar Two becomes part of year-end close and tax governance, not only a policy development to monitor.

Qatar’s Pillar Two legal basis and timeline

Key legal instruments underpin Qatar’s Pillar Two rollout, clarifying when the rules take effect and how the IIR and DMTT are administered in practice.

Note: Law No. 22 of 2024 was published in Qatar’s Official Gazette on March 27, 2025, and applies to fiscal years beginning on or after January 1, 2025.

What the February 2026 implementing rules add

On February 12, 2026, the Council of Ministers resolution (published in the Official Gazette) strengthened the operational framework by amending the Executive Regulations and setting out detailed rules for applying the IIR and DMTT. The framework is closely aligned with the OECD GloBE model rules, and the GTA has indicated that additional guidance manuals will follow as implementation advances.

Qatar’s implementing rules are framed to cover the country’s main investment and licensing platforms, including the Qatar Financial Centre, the Free Zones regime, Qatar Science and Technology Park, and Qatar Media City. For groups that meet the Pillar Two revenue threshold, that breadth is important: the minimum-tax calculation is assessed at the Qatar jurisdiction level, so incentive-driven outcomes can still create a residual top-up once GloBE adjustments are made.

The implementing rules include several technical features that can affect computations and compliance design, including separate effective tax rate and top-up calculations for certain entity types (such as domestic joint ventures, permanent establishments, and minority-owned constituent entities) and joint-and-several liability concepts for domestic constituent entities in relation to DMTT payable in Qatar. Qatar’s legislation introduced the IIR and DMTT without adopting the Undertaxed Payments Rule (UTPR) at this stage, meaning groups may still face UTPR exposure elsewhere even if Qatar’s regime is in place.

How the IIR and DMTT work in practice

Pillar Two applies a jurisdiction-by-jurisdiction top-up approach. A group’s effective tax rate in each jurisdiction is compared with the 15 percent minimum; where it falls short, a top-up amount can arise.

Income Inclusion Rule: The IIR can require a Qatar-based ultimate or intermediate parent to pay top-up tax on low-taxed foreign profits, subject to Pillar Two ordering rules. This is relevant for Qatar-headquartered groups with offshore subsidiaries or joint ventures, particularly where foreign operations benefit from preferential regimes.

Domestic Minimum Top-up Tax: Qatar’s DMTT is intended to qualify as a Qualified Domestic Minimum Top-up Tax, allowing Qatar to collect top-up tax on low-taxed Qatar profits domestically, reducing the likelihood that the same top-up is collected elsewhere under a foreign IIR. For many groups, the DMTT is therefore the most material rule, because it determines whether Qatar collects the top-up locally.

Computation and data: Calculations are built from consolidated financial statement data adjusted under GloBE concepts, including GloBE income, covered taxes, and exclusions such as the substance-based income exclusion. In practice, this is a data and controls exercise as much as a tax calculation, especially where accounting systems differ across entities or joint ventures.

Allocation, liability, and safe harbors: Once a jurisdictional top-up is determined, it is allocated across constituent entities in that jurisdiction. Transitional and ongoing safe harbors (including country-by-country reporting and de minimis approaches, where adopted) can reduce compliance burden and, in some cases, eliminate top-up tax. Groups should monitor whether Qatar issues further administrative guidance on elections, safe harbors, and filing formats.

Who is in scope and why this matters

The rules apply to MNE groups with consolidated global revenues of at least EUR 750 million (approximately US$890 million) in at least two of the four preceding fiscal years. The scope includes Qatar-headquartered groups with operations outside Qatar and foreign-headquartered groups with operations in Qatar; purely domestic Qatar groups remain outside scope.

The policy logic is a top-up tax. If effective taxation in a jurisdiction is below 15 percent, an additional amount can be charged to reach the minimum. Qatar’s domestic top-up is positioned to keep taxing rights in Qatar for Qatar profits that might otherwise be collected elsewhere under Pillar Two ordering rules. Qatar has been listed in the OECD Central Record as having transitional qualified status for its IIR and QDMTT Safe Harbour (as of Jan 5, 2026), which can influence how other jurisdictions treat Qatar outcomes and safe harbor access.

Compliance, reporting, and administration considerations

Pillar Two compliance is reporting-intensive because it relies on jurisdictional computations that may not match local corporate income tax bases. Qatar’s Executive Regulations confirm that no notification will be due before June 30, 2026, and notification deadlines will be confirmed in a forthcoming decision from the GTA President.

Qatar constituent entities within in-scope groups are expected to register through a GTA-designated electronic portal, with administrative details to be set out in a GTA decision. Groups should also plan governance around filings and payments, including whether to nominate a local entity to coordinate compliance. The GloBE Information Return is generally due 15 months after the fiscal year-end (18 months for the transition year), and local notification may be required when the return is filed in another jurisdiction.

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For groups preparing for first-year compliance, a practical workflow is to start with a scope and entity map, then run a preliminary effective tax rate model for the Qatar jurisdiction using available financial statement data. That model can identify whether safe harbors are likely, whether data gaps exist, and which entities drive the outcome.

From there, groups can define data collection routines, document key judgments, and build an audit-ready file to support future queries.

Investment incentives and special regimes

Minimum tax provisions may apply despite conflicting rules and can affect entities benefiting from preferential regimes. For in-scope groups, incentives are no longer evaluated only against local statutory rates. The relevant question becomes whether the Qatar jurisdictional effective tax rate falls below 15 percent once Pillar Two adjustments and exclusions are applied.

This shift does not automatically negate incentives, but it can change their net value and the internal approvals needed to justify them. Groups should reassess incentive packages alongside substance-based exclusions, expected top-up amounts under the DMTT, and the incremental compliance cost of Pillar Two reporting. For new investments, it is increasingly important to model outcomes at the group level and to coordinate with parent jurisdiction Pillar Two positions.

Penalties and enforcement signals

Penalties for non-compliance include a daily penalty for delayed IIR and DMTT returns (reported as QAR 500 per day, approximately US$137 per day, capped at QAR 180,000, approximately US$49,450), a 2 percent monthly penalty for late payment of top-up tax, and penalties for registration, filing, and record-keeping failures. It also notes transitional penalty relief, which may reduce exposure during early-stage implementation. Because penalties are triggered by process failures as well as tax outcomes, internal controls and documentation should be treated as a core part of Pillar Two readiness.

Key takeaways

Qatar’s Pillar Two implementation introduces a domestic and global minimum tax framework centered on the IIR and a DMTT intended to qualify as a QDMTT. For in-scope MNE groups, the priority is operational readiness: confirm scope, map all Qatar constituent entities and parent links, and build jurisdictional effective tax rate models to understand potential top-up exposure.

Because notification deadlines are still being finalized and no notification is due before June 30, 2026, groups should use the interim period to align finance and tax data, establish governance for calculations and documentation, and monitor further GTA guidance. Groups operating under special regimes should reassess incentives through a Pillar Two lens, as minimum tax calculations may change the net value of preferential arrangements even where the commercial footprint remains unchanged.

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