Executive summary

Ministerial Decision No. (3) of 2026 (the Decision), announced by Qatar's Council of Ministers in January 2026, was published in the Official Gazette on 1 March 2026. The Decision grants a capital gains tax advantage to companies resident in the State of Qatar during their transfer of assets or shares to related parties in group restructuring transactions. In addition, capital gains of resident natural persons shall be exempt from income tax within the framework of restructuring of parent and subsidiary companies and/or companies within the same group.

The Decision seeks to enhance Qatar's investment climate and promote sustainable institutional growth, in alignment with international best practices, and is effective from 2 March 2026.

Background

The Qatar Income Tax Law No. 24 of 2018 (the Income Tax Law), as amended by Law No. 11 of 2022, offers limited tax advantages concerning capital gains.

Generally, any sale or transfer of assets, including transactions between related parties, is subject to capital gains tax with certain exceptions, including:

• Capital gains derived from revaluation of a company's assets upon offering the assets as a share in-kind for the purpose of contributing to the capital of a shareholding company that is resident in the State of Qatar
• Capital gains derived from disposal of immovable property abroad, if tax is paid abroad
• Capital gains derived from disposal of shares in companies listed on the Qatar Stock Exchange

As noted above, the Income Tax Law does not offer tax relief on capital gains resulting from the transfer of shares or assets during group restructuring. The Decision's introduction of the tax advantage is expected to encourage essential restructuring initiatives and ultimately influence investment decisions.

Tax advantages based on the Decision

In the context of corporate restructuring transactions within Qatar, the Decision stipulates the types of transactions that would qualify for the capital gains advantage, as well as the specific conditions that taxpayers should meet to avail the advantage, as highlighted below:

1. Transactions eligible for the Decision's capital gains tax advantage

The capital gains tax advantage in Qatar is applicable to the following transactions, provided that the conditions mentioned under (2) below are satisfied:

• Asset swaps as part of internal group restructuring in the State
• Asset revaluation for the purpose of in-kind contributions to the capital of a company resident in the State
• Disposal of assets within the framework of mergers and demergers in the State
• Disposal of assets as part of corporate restructuring aimed at contributing to the capital of a holding company resident in the State
• Disposal of assets within the context of corporate restructuring for the purpose of listing on the Qatar Stock Exchange

Multinational enterprise (MNE) groups subject to Income Inclusion Rules under global minimum tax standards, as well as entities subject to Domestic Minimum Top-up Tax, can benefit from the tax advantage, provided that assets and liabilities are transferred in exchange for equity shares issued by the transferee or a related party and, in the case of liquidation, for a capital interest in the receiving entity. Upon subsequent disposal of the transferred assets, the transferee determines any gain or loss based on the transferor's historical net book value. It is important to note that the decision includes exceptions from some provisions for such MNE groups.

2. Conditions for availing the Decision's capital gains tax advantage

To potentially benefit from the capital gains tax advantage provided in the Decision, the following conditions apply:

• Both the transferor and transferee of the assets must be residents of the State and subject to the provisions of the Income Tax Law and its amendments.
• The transferor and transferee must have been related parties or part of the same group, as defined by the International Accounting Standards, for at least 12 months prior to the asset transfer.
• The relationship between the transferor and transferee must continue for at least two years following the asset transfer.
• The transferor must own at least 75% of the transferee's equity, or vice versa, or both entities must be at least 75% owned by another individual who is a member of the same group.
• In cases of transfer of assets for group restructuring purposes, and revaluation of assets for contribution as in-kind contribution shares, the transferee must retain the transferred assets for a minimum of two years.
• The capital increase for the transferee company under merger must be completed within a maximum period of two years.
• The contribution to the capital of the holding company must be finalized within the same year.
• The listing process on the Qatar Stock Exchange must be completed within one year following the year in which the tax advantage is realized.
• The transfer of assets must be executed for a valid economic reason.

3. Eligibility for the Decision's capital gains advantage

A taxpayer seeking to benefit from the capital gains advantage outlined in the Decision should submit an application to the General Tax Authority (GTA). If the GTA does not respond to the application within 30 days, the application will be considered implicitly accepted by the GTA.

Implications

Companies engaged in group restructuring can transfer their assets or shares within the same group without incurring capital gains tax liability, provided they adhere to the conditions outlined in the Decision.

However, the GTA reserves the right to revoke this tax benefit if any terms or conditions specified in the Decision are violated. Such breaches may lead to the imposition of capital gains tax retroactively from the year in which the tax advantage was utilized.

Therefore, although the Decision offers a beneficial tax framework for group restructuring, compliance with its stipulations is crucial to avoid potential tax liabilities.