ECL stands for Expected Credit Loss, a concept used in financial accounting to account for potential losses that may occur due to credit risks associated with financial assets. The International Financial Reporting Standards (IFRS) 9 require companies to use an ECL model to calculate the potential losses on financial assets, such as loans and trade receivables.

The ECL model is based on the assumption that financial assets are subject to credit risk, which is the risk of loss that may arise if a borrower fails to repay a loan or meet other contractual obligations or if a client fails to pay the bills to the company. The ECL model requires companies to estimate the probability of default and the amount of loss that would result from default, and to incorporate this into their financial statements.

The ECL model involves three stages of analysis.

1. The first stage involves identifying the credit risk of financial assets and the probability of default over the next 12 months.
2. The second stage involves estimating the credit risk over the remaining life of the financial asset.
3. The third stage involves estimating the potential losses associated with the credit risk.

For example, the Probability of Default (PD) is 1.5%, the Loss Given Default (LGD) is 70% and the outstanding balance as of year end is QR. 10 Mn.

The ECL model is a forward-looking model that takes into account a range of factors that could impact the credit risk of financial assets, such as changes in economic conditions, industry trends, and company-specific factors. By accounting for potential losses associated with credit risks, the ECL model provides a more accurate picture of a company's financial position and helps investors and other stakeholders to make more informed decisions.

The use of the ECL model has become increasingly important since the global financial crisis, as it helps to ensure that financial institutions and companies are adequately accounting for potential losses associated with credit risks.

Overall, the ECL model is a key tool used in financial accounting to account for potential losses associated with credit risks. It is a forward-looking model that helps to ensure that financial institutions and companies are adequately accounting for potential losses, providing a more accurate picture of a company's financial position, and helping investors and other stakeholders to make more informed decisions.

An external audit is a process that provides an independent opinion on a company's financial statements, operations, and compliance with applicable laws and regulations. This opinion is expressed by a certified public accountant (CPA) who is not an employee of the company being audited.

An external audit is an important tool for ensuring the accuracy and reliability of financial information. It provides reasonable assurance to stakeholders, including investors, lenders, and regulators, that a company's financial statements are free from material misstatements and errors. The audit process includes reviewing the company's accounting records, policies, and procedures, interviews with key personnel, and testing of the company's internal controls.

External audits are required by law for private and publicly traded companies, as well as for companies that receive government funding or operate in regulated industries. However, even companies that are not legally required to undergo an external audit often choose to do so in order to demonstrate their commitment to transparency and accountability.

One of the key benefits of external audits is that they can identify areas where a company can improve its financial reporting and internal controls. The auditor may recommend changes or improvements that can help the company operate more efficiently and effectively.
Another benefit of external audits is that they can help build trust between a company and its stakeholders. An external audit can reasonably assure investors and other stakeholders that the company is being managed responsibly by providing an independent and objective assessment of a company's financial statements.

Overall, an external audit is essential for ensuring the accuracy and reliability of financial information, building trust with stakeholders, and identifying areas for improvement. Companies that undergo external audits demonstrate their commitment to transparency and accountability, which can ultimately lead to increased confidence in the company and its operations.

Qatar has a relatively simple tax system compared to many other countries. There is no personal income tax in Qatar, but corporations do need to pay 10% percent of their profit share as tax. The simplicity of Qatar's taxation system makes it relatively easy to file a tax return through the Dhareeba portal, that has published by the General Tax Authority in September 2020.

But before you do that, you will need to understand the type of tax, what is deductible and what is not deductible, and what amount you need to pay.

Types of Taxes in Qatar

1. The corporate tax of 10% should be imposed on the profit share of any foreign investor doing business in Qatar. Qatari and GCC citizens are exempted from paying the tax provided that they are residents of Qatar according to the Income Tax Law 2018, its executive regulation, and its amendments.
2. Withholding tax of 5% on any service provided and destinated to Qatar. If the service is going to be exploited, consumed, and used in Qatar, then it is subject to a 5% withholding tax regardless of the location of the service provider. The payment to GTA must be transferred within 16 days following the month when the payment occurred.

Qatar Financial Center authority gives more incentives to the taxpayer by not applying the withholding tax. However, there is a corporate tax of 10% on the net profit generated by the company. Qatari citizens are only exempted if they meet certain criteria according to the QFC Tax Manual, which explains in detail the tax structure.

Qatar Free Zone jurisdiction gives incentives to taxpayers for a period of 20 years by exempting them from paying corporate tax. However, these companies are still requested to submit audited financial statements by an accredited auditor listed by QFZ.

Value-Added Tax (VAT)

Custom Duties

Excise Tax

Social Security Contribution

Corporate Tax Calculation in Qatar

• Any commercial activity in Qatar
• Complete or partial execution of contracts in Qatar
• Properties in Qatar
• Services provided within Qatar
• Income from loans
• Income generated offshore without having a permanent establishment in the other state, then income should be taxed in Qatar.

Hence, any income that your company accrues from these factors is considered taxable under the total state income. Apart from this, you could also be required to pay an additional tax as per the 'Double Tax Agreement.' To fully understand whether your company qualifies for this, you will need to hire a reputed tax advisor in Qatar, like HLB AG.

How can we help

As all other industries and professions have embraced the digital revolution, so must accountants and accounting firms. The world has already witnessed the collapse of several business empires due to technological redundancy. Taking heed of such lessons, modern-day accountants in Qatar must adapt to the changing digital environment. Moreover, equipping yourself with some of the top modern accounting skills can also allow accountants to enter one of the leading accounting companies in Qatar.

If you are an accountant who wishes to remain updated with the times or is simply looking to expand your knowledge, this curated list of the top 5 modern accounting skills will help you.

Learn to Optimise Time and Resources

Accountants waste most of their time completing transactional tasks. These tasks are routine administrative and monotonous tasks like updating balance sheets. Such routine and manual processes leave the functional capabilities of even the best accountants needing more utilized. By leveraging modern technological advancements, accountants today can automate these transactional activities. This will enable accountants to provide a higher value of service to their clients. 

Understand and Interpret Into Business Insights

In today's competitive environment, most companies invest less in human resources and more in adding resources and technical capabilities to their businesses. In such a scenario, the accounting department may need more staff. As a result, modern-day accountants may have to do their daily accounting duties along with participating in developing valuable business insights. Therefore, you can advance your career as an accountant and forge a path toward upper management.

Develop Excellent Written Communication Skills

Another critical skill that modern-day accountants need to have is exceptional written communication. Since accountants and financial employees are more familiar with numbers, they may fumble regarding the written word. However, in the modern business world of Qatar, where businesses from diverse nationalities communicate and partner, English has become an important language of communication. Hence, the contemporary accountant working in one of the best accounting firms in Qatar must also be highly adept at written communication in English. 

Be Able to Teamwork (On-site and Remote)

Teamworking has been considered one of the most important skills that modern-day accountants can have. In today's inclusive and diverse business realm, accountants need to be able to work in teams to be able to achieve the company's goals. However, with the advent of the pandemic and the popularity of online communication media, modern-day accountants should also be able to work in teams, on-site, or remotely.

Learn About Regulatory Compliance

This is another critical skill that modern-day accountants need to develop. Several emergent guidelines and standard frameworks govern accounting and accounting practices in Qatar. For example, systems of taxation like Dhareeba are Qatar's latest innovations in accounting practices. A modern-day accountant is well-versed in these changes and works accordingly to abide by them.

Final Thoughts

Some of the best accounting firms in Qatar employ only those accountants who have developed these modern-day accounting skills. Reputed firms like HLB AG offer some of the best accounting and financial services and are one of the leading accounting companies in Qatar.

In reference to the “Law No 10/2021 measures for hosting FIFA world cup, and Resolution No 9/2022 on tax and customs exemptions for hosting World Cup 2022”, resident and non-resident beneficiaries that have an agreement, directly or indirectly, with any business relation connected with FIFA and its affiliates or FIFA contractors according to the terms of the Law will be eligible to tax exemption as stated in article 8 of law No 10, and article 13/1 of the resolution No 9/2022.

1. Resident and non-resident beneficiaries that have any agreement with FIFA directly or indirectly, then, FIFA and in coordination with the supreme committee for delivery & legacy should apply at the General Tax Authority to obtain a tax exemption certificate issued by the latter according to articles 9 and 13/1 of the resolution No 9/2022 exempting the same companies from paying any tax during the FIFA world cup period.

2. Resident and non-resident beneficiaries will be exempted from excise duty provided they apply for a refund of excise by supplying the original invoices, bank account certificate, and proof that the purchase is related to FIFA-related activities.

3. Resident and non-resident beneficiaries that do not have such agreements are not eligible for this exemption.

4. You cannot consider the above as a tax advise, if you need to get further information, you need to contact our tax expert.

NOTE: Any tax advice given is founded on the information given to us and on the current tax law including judicial and administrative interpretation, and the facts. Tax laws are constantly changing, often retroactively, and this could lead to additional taxes, interest fees, or penalties. Our advise might not be applicable if the information given to us is inaccurate or insufficient, or if the law or how it is interpreted changes. We are not responsible for updating our advice for changes in law or interpretation after the date hereof.

Connect with our team at HLB AG for professional advice regarding tax, business, finance, compliance and AML. Contact Us

Before we understand how a feasibility study can benefit your project, it is essential to understand what exactly is meant by a feasibility study. In simple language, a feasibility study is a survey or a pre-determination of the prospects of the proposed project.

• Is your project viable?
• Is the project vital?
• Do the strengths of the project outweigh the weaknesses of the project?
• Threats and risks the proposed project poses

These are just some points you will have to address in a feasibility study before commencing a project.

Many companies and businesses conduct feasibility studies before commencing any new project. It lets the company know if the project is worth the investment in money, manpower, and time. There are many aspects of a feasibility study. It does not merely determine if there is value in the money invested but also determines if the project is legally permitted, technically possible, and operative, among other possibilities.

Therefore, from the above, it is clear that feasibility studies are essential and beneficial to businesses in more ways than one. The main aim of a feasibility study is to ensure that there are no bad investments and no waste of time and effort. Below we have come up with certain key benefits of feasibility study plans.

Determines Project Costs

A feasibility study can determine tentative costs for a certain project. Though final costs may vary, feasibility studies can provide a more or less definite estimation from the start to the completion of a project. This gives companies an opportunity to plan their annual budgets accordingly.

It May Lead to A Whole New Idea or Project

A feasibility study is an in-depth forecast of a particular venture. While conducting this exhaustive research, new ideas may spring up, leading to totally new plans and campaigns that were not evident while starting out the particular project. A feasibility study can be rightly termed as a “brainstorming” session.

Guides a Project in the Right Direction

Management of a company or employees of a company can be guided in the right direction with a feasibility study. It is advisable to hire professionals like Antonio Ghaleb & Partner CPA, a trusted auditing company, to conduct authentic feasibility studies for your projects.

Less Chance of Failure of The Project

While many new business ventures have an equal chance of succeeding or failing, a project initiated after a thorough feasibility study has a lower chance of failing. This is because an exhaustive and methodical feasibility study is able to determine the viability of a particular project.

Determines the Actual Needs of the Project

Project requirements are endless. From raw materials to resources, technical knowledge, and manpower, the list is infinite. Many times the requirements procured at the start of a project may not even be used throughout the project. This results in a colossal waste of money for the company. However, with a meticulous and detailed feasibility study, it is possible to determine the definite needs for the project, thereby leading to a minimum or nil wastage of company resources.

A payroll management system is an organizational structure that controls the salaries of employees. However, today, payroll management systems encompass a much larger profile. It not only includes managing wages of employees but also manages the leave and holidays of employees based on the Qatari Labour law, book and file keeping, and pays salaries based on the WPS system. The payroll management system is complex and requires thorough deliberation and investigation before arriving at final figures. Large companies and now even smaller companies are looking to outsource the payroll management system to experts who can offer a more organized and fool proof method of managing the payroll system for the company

While many business advisory service companies claim to offer the best payroll management system, it is best that you don't jump for the first one you come across. This guide will help you choose a payroll outsourcing company that best suits your needs.

Identify Your Company Requirements

Before setting out to look for the best payroll outsourcing company, you must understand the needs of your company. Do you just need a company that will manage the wages of your employees? Or do you need a company that can offer you more than just basic payroll management? Understanding the needs of your company can give you a rough idea of what you need from your payroll outsourcing company.

Budget Constraints

Every company has finance allocated for different purposes. It is best to fix a budget for your payroll outsourcing company and look for a company that provides you with all the services you need and within your budget. Antonia Ghaleb & Partner CPA, one of the leading business tax consultant companies in Qatar, offers affordable payroll management systems packages to fit your requirements.

Customer Testimonials

Once you have a shortlisted record of a few payroll management companies, it is important to browse through what other customers have to say about their services. You can go to the testimonial page on the company's website for a true picture of the quality of the company's services. You can even contact a customer personally to find out more. Enquiring about the market reputation of the company is vital. Apart from the quality of services, you must know that the reputation of your own company is at stake while hiring a payroll management outsourcing company.

Identify the Outsourcing Company Specialties.

One payroll management outsourcing company may be able to offer you specialized services. Find out if the company can offer you something more in their packages. You might want to include HR management in the payroll management systems.

Software Adopted

Remember to ask the payroll outsourcing company about the software they use to manage the payroll. It is important that the company has advanced and easy-to-use payroll management software. This way, you can understand the payroll management system and make the business more transparent.

Non-Disclosure of Confidential Information

Every company has vital information that is strictly confidential. However, while outsourcing payroll management systems, this company may receive confidential information vital to the performance of its duties as a payroll management company. Make sure that the outsourced company is aware that the information is confidential and remains that way.

Auditing is the process of inspecting and maintaining books of accounts. It portrays the financial position of the company. Irrespective of the size, all businesses and companies require their books of accounts to be inspected annually. There are various advantages of auditing for businesses.

Some of the Advantages of Auditing

Assures Investors

Auditing of businesses by a top auditing firm in Qatar assures investors that there are no errors in the finances of the company and no funds are being misappropriated. Having the books of accounts inspected from time to time gives an assurance to investors and shareholders about the financial position of the company.

Keeps the Organisation in Check

During an audit process, many discrepancies may come to light. Some certification may be amiss or certain documents may not be up to date. In these situations, hiring auditing services from time to time will be able to keep a check on these discrepancies. This will ensure that the company complies with all the mandatory regulations.

Promotes Efficiency in Management

Hiring a top auditing firm in Qatar for your company’s audit can promote efficiency in management. An auditor will be able to gauge the efficiency of every department in the company and inform the company of any shortcomings if any. This way, the management can improve departments that are not performing.

Ascertain Profit or Loss for The Company

Auditing services for businesses can ascertain if the company has made a profit or loss. With this knowledge, the board can take decisions concerning the management of the company.

Fair opinion

One of the advantages of hiring an external auditing service is that an external auditor will give a true and fair opinion of the company's finances. An external auditor, being an outsider to the company, will give an honest and impartial view of the company’s accounting.

Required for bank loans

A bank lending money to the company or firm will require audited statements of accounts of the company. Therefore, hiring a top audit firm is advantageous while securing loans from banks.

Verifies the total tax payable

Every company or firm is required to pay certain tax amounts as per the law. Auditing services determine the right amount of tax payable by the business.

Improves the Goodwill

Last but not least, hiring auditing services for your business increases the goodwill of the company. Investors, shareholders and employees are assured of the company’s financial status after the accounts of the firm are audited. This increases the reputation and value of the business.

As seen above, hiring a top audit firm like Antonio Ghaleb & Partner CPA in Qatar has several advantages.

Before pondering over the points to consider before choosing an audit firm in Qatar, it is necessary to know why it is important to hire a top audit firm. Hiring the service of an auditing firm is inevitable for any business organisation in the country. There are several reasons auditors are required for any business, company or industry.

• An auditor or auditing firm portrays the true financial position of a company.
• Financial decisions of the Board may be based on the findings of the Auditing firm.
• Auditing helps to keep the company in a financially stable position
• Hiring an auditor can increase the credibility of a firm or business.
• Timely auditing of financial statements in a company can avoid frauds and dubious transactions. It can save the company from any untoward financial crisis.
• Auditing can improve business processes in a company.

Now that you know the importance of hiring auditors in Qatar, you must know how to select the right auditors for your company.

Auditing is a specialized professional process that can be performed only by well-experienced experts in the field of corporate finances. Hiring the right auditing firm in Qatar can be a daunting task. Here are a few points to consider before you select auditors.

Qualifications of Members of The Auditing Firm

Before considering top audit firms, it is important to ensure that the auditors are well qualified and experienced. Hiring an under qualified auditor can prove detrimental to the interests of the company. It is necessary to check the qualifications and eligibility of the auditing firm.

Reputation of Auditing Firm

Choosing a top auditing firm in Qatar can be an uphill task. This is because of the innumerable auditing firms that dot the nation. To select the best auditing firm from a list of audit firms in Qatar, it is important to delve into the reputation of the firm.

Reputation is the general opinion held by the majority of the community. You can find out more on the firm's reputation through client testimonials, customer endorsements and market trends.

Cost Effectiveness

It is important to check for a tax consulting firm that the company can afford. Choosing expensive taxation services can be a burden on the company's finances.

Auditing charges may vary from firm to firm; therefore, it is necessary to know the fees charged before selecting an auditing firm. You do not want to be in a situation where you are caught unaware of the high auditing fees of an auditing firm. Top auditing firm in Qatar, like Antonia Ghaleb & Partner CPA divulge all details of costs and expenses to clients upfront, with no hidden costs or agenda.

Certifications of Auditing Firm

Auditing firms must constantly update themselves with the latest marketing and financial trends across the nation. Before selecting a firm it is advisable to check for certifications of its auditors. The auditing firm must show constant training to its officers in order to be able to offer professional services to clients.

Selecting the right auditing firm from the list of top auditing firms in Qatar can prove to be advantageous for your company. The right auditing firm can identify potential financial risks for the company and help to avert adverse financial situations.

Although internal and external audits are similar with regard to their approach, they differ widely when it comes to their focus points. The working principles of both internal and external audits are the same, and there lies the point of confusion for many.

There are several differences between internal and external audit services in financial parlance. Below is a quick brief of the critical points of difference between the two.

Enumerating on the above, internal audit services are more holistic in their approach and tend to cover all matters relating to the company's operations. An internal auditor will look into aspects that affect the company's performance. Whereas external audit services are more specific and relate to only the company's financial statements, external auditors are concerned with only finance, taxes, and accounting statements.

Though not mandated by any law, internal auditing is a preferred system of operations in any company. It allows the company to assess the risks and plan the future course of action. On the other hand, external auditing is a statutory requirement. Companies must have their books of accounts externally audited once a year. Appointing external auditing services is Government compliance.

Having your company's financial statements internally audited by a third party provides the company with vital information that can aid the company in making better financial and operational decisions. External auditing services by a third party increase your company's credibility in public. Especially in cases of public listed companies, external audits provide an unbiased view of the company's financial situation.

As internal auditing services is an ongoing process, it allows the company to assess its management systems and make rapid changes concurrently. External auditing services assess the companies' financial statements before the end of every financial year.

Both internal, as well as external auditing services are equally important. Hiring professional internal and external auditing services can aid the company in more ways than one. In fact, effective internal and external auditing systems in a company can liaise to help the company achieve its goals.