primularossa

Hallo to anyone, we are considering moving to Doha from Italy and, in evaluating if it is economically worthy we need to have some information about taxation. Questions are:

1) how is the taxation system in Qatar: I've read that salaries for expats are tax free, but I cannot believe it. Is it true? That means that what they offer you as gross salary is what you really get?

2) when you return to Europe, will your money saved from Qatar be subject to taxation of your country as if you had earned it in your country of origin?
What is your experience?

Thank you very much

gottheTshirt

There is no income tax to pay in Qatar. Salaries in Qatar are tax free. The tax you pay in Italy depends on the tax rules in Italy.

primularossa

Than you very much for your answer. Tax rules in Italy are quite complicated to read and to apply. This is why I asked for direct experience.

Qatar is not in the "black list" of "fiscal paradises (like Caiman, Virgin Islands and so on) and this is why I asked to confirm that salaries are not taxed.

In Italy, like in many other European countries I suppose, there is the regime of double taxation unless there are agreements between states for not taxing twice a worker.

If the worker is abroad for most of the year, he is taxed according the rules of the guest country (i.e. nothing in Qatar). But I know of people who have been taxed in Italy, even if they work (or have been working) abroad, just because they have come back after some years, or because they kept a house in their home country or because the family lives in Italy........

Is there anyone who has a direct experience in an EU country?
thanks

numbercruncher

In order to incur personal income tax in Italy, you either
a) generate income from an Italian source (in most cases this would refer to employment income and/or capital gains) and/ or

b) be considered a tax resident for Italian income tax purposes

Since you would be relocating to Doha, a) does not seem to apply. In order to figure out whether you are considered to be a tax resident for Italian income tax purposes you typically must meet one of the following two criteria:
a) have a life centered in Italy
b) be registered in the Italian Population registry for more than 183 days

Assuming you will
a) not maintain a permanent residence/ establishment in Italy (which is not rented out) and b) your entire family (grandma & granddad not included ...) will relocate to Qatar, and
c) you will not be registered in the Italian Population registry for more than 183 days

than you should not be ok.

Please note that typically Italian source income (rental property, stocks portfolio etc.) will be subject to Italian personal income taxation, even if your employment income is not, since it is derived from a Qatari source.

There appears to be a double tax agreement (DTA) in place and operational between Italy and Qatar, which follows the standard OECD format. As such it stipulates a 'right to tax' for the state in which you spend more than 183 days (183 day rule) a year.

Hence, if you choose to maintain a permanent residence in Italy, which is not rented, but available for your personal use, for instance as family retreat during the summer months, I would suggest you keep close track of the number of days you spend in Italy, to ensure you are prepped in case the Italian IRS would like to discuss your tax status at some stage, which can be a couple of years down the road upon your return to Italy.

In any case, I suggest you speak with a local Italian tax adviser in order to corroborate the above.

Enjoy Qatar.