Executive summary

On 17 October 2023, the European Union’s (EU) Economic and Financial Affairs Council (ECOFIN Council or the Council) formally issued the conclusions on the revised EU list of noncooperative jurisdictions for tax purposes and based on such conclusions, Qatar has been removed from the EU state-of-play document (or the “grey list”).

A press release issued on 17 October 2023 by the Council confirms that Qatar fulfilled its commitments to implementing tax good-governance principles by amending a harmful tax regime — the foreign-source income exemption (FSIE).

Detailed discussion

Background

In September 2021, Qatar was included in the grey list, primarily on account of the FSIE regime (deemed to fall under Section 2.1 of Annex II: harmful preferential tax measures).

In February 2023, the Council concluded that Qatar, which committed to amend or abolish its harmful foreign-source income exemption regime by the end of 2022, demonstrated tangible progress in 2022. On these grounds, Qatar was granted an extension until 31 March 2023 to implement the reform measures.

Subsequently, in February 2023, Qatar enacted amendments to the Income Tax Law by revising the FSIE for companies operating under the State Tax Regime.

Revised list

On 17 October 2023, following the recent revision of the list, the ECOFIN Council issued the revised EU list of noncooperative jurisdictions for tax purposes.¹ In particular, through Resolution No. 13879/23, the Council issued:

• An updated EU list of noncooperative jurisdictions (Annex I, the blacklist)
• An updated state of play with respect to commitments taken by cooperative jurisdictions to implement tax good-governance principles (Annex II, the grey list)

Qatar was removed from the updated state of play document, being considered as having fulfilled its commitment by amending a harmful tax regime.

The updated list was issued following an initial meeting by the ECOFIN Council held on 3 October 2023.

Implications

Following the removal of Qatar from the grey list, the country is now listed within those jurisdictions cooperating with the EU that currently have no pending commitments. As the work on the EU List is a dynamic process, companies should continue closely monitoring developments.

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For additional information with respect to this Alert, please contact the following:

EY Consulting LLC, Doha

• Ahmed F. Eldessouky, Qatar Tax Leader | ahmed.f.eldessouky@qa.ey.com
• Kevin McManus, International Tax and Transaction Services | kevin.mcmanus@qa.ey.com
• Marcel Kerkvliet, International Tax and Transaction Services | marcel.kerkvliet@qa.ey.com
• Roger Akl, Global Compliance and Reporting | roger.akl@qa.ey.com
• Fareed Patel, Global Compliance and Reporting | fareed.patel@qa.ey.com
• Sherif Ismail, Global Compliance and Reporting | sherif.ismail@qa.ey.com

Ernst & Young LLP (United States), Middle East Tax Desk, New York

• Asmaa Ali | asmaa.ali1@ey.com

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

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ENDNOTE

¹ For details, see EY Global Tax Alert, ECOFIN adopts revised list of non-cooperative jurisdictions for tax purposes, dated 18 October 2023.