No VAT Return for Businesses Attending the Fifa World Cup

As the FIFA World Cup approaches, many businesses are utilising the event as a significant business opportunity. Generally, when companies embark on business trips, conferences and events, they can claim a VAT refund on their expenditures. Under normal circumstances, to support the hosting of significant sporting events and their test competitions, the Tax Administration of the hosting country will formulate and publish administrative measures that allow for the refund of VAT regarding the organisation and hosting of the event.

However, when it comes to business in Qatar - VAT refund opportunities cease to exist. Why? Well, they have yet to implement VAT at all. Here’s what businesses need to know about VAT dealings in Qatar and how it affects their expenses and VAT refunds. 

Qatar remains VAT-free

Qatar forms part of the Gulf Cooperation Council (GCC) with Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Oman. In 2017 these countries signed a framework that would guide the implementation of the Value-added Tax. However, more than half a decade later, Qatar and Kuwait are the two single members of the six member states that have yet to follow through on this agreement.

On the contrary, Saudi Arabia already tripled its VAT rate from 5% to 15% in 2020 to bolster state revenue when oil prices hit a low. So, why has Qatar continued to abstain from implementing a VAT levy, and are there any plans for change? 

Expected tax reforms in Qatar 

Finance Minister, Ali Al Kuwari, has confirmed that tax reforms are still in the cards for Qatar. However, he emphasised that they will refrain from making changes until they have found ‘the right time.’ Their lack of urgency is primarily due to the fact that Kuwari feels tax reforms will add an extra burden on consumers. In addition, inflation is also a pressing issue for the host of the upcoming soccer World Cup, re-enforcing the fact that they are in no rush to add a VAT levy to goods and services. 

Thus far, there has yet to be any indication that the application of VAT could come into action before the FIFA World Cup. However, it is still possible to occur in 2023 with an anticipated VAT rate of 5%.

Impending Impact of VAT in Qatar 

Value-added Tax (VAT) is a consumption tax levied on the sale of goods and services within (or imported into) a country. Although the effective date is yet to be confirmed, businesses can expect significant changes.

A business registered for VAT could claim a credit for the amount of VAT 

paid on expenditures incurred relating to their taxable business activities. Therefore, as a business, you may need to consider certain implementations before the VAT regime. Once the VAT regime has been implemented, like in any other country, there will be specific VAT rates and exemptions.

Looming VAT Rates in Qatar

The VAT rates are expected to be as follows:

• Standard VAT rate of 5% on most goods and services
• Zero-rated on certain exports; international transport; and medication
• Exempt: financial services; health; residential property and land; education

It begs to repeat that these changes have not yet been implemented. Therefore, businesses cannot file any VAT refund claims for their time in Qatar before the expected change. 

VAT return and the FIFA World Cup

As a business, you may be acquainted with Foreign VAT recovery and may be under the assumption that because it works in one country, it should apply to all. Unfortunately, this is not the case. Ultimately, there is no concrete evidence that VAT levies will be implemented before the World Cup. 

At VAT IT, we pride ourselves on using our extensive network, experience and knowledge to help you with correct VAT returns - which includes the duty to inform you when there is no possible refund opportunity. 

Fortunately, VAT IT’s on top of all the latest news and VAT updates, so your business can rest assured that when needs be - you’re backed by experts.