1.

If Qatar decided to introduce a tax holiday for foreign enterprises, which industry would you
recommend and why? Can you think of one advantage and one disadvantage of introducing a tax
holiday in Qatar? (4 marks)
A tax holiday is a temporary break from paying certain taxes, provided by governments to stimulate
economic activity or encourage investment in specific industries.
Introducing a tax holiday for foreign enterprises in Qatar's environmental sustainable building industry,
with durations ranging from 0 to 5 years for small projects and extending to 5 to 10 years for larger projects
encompassing cities or regions, would incentivize diverse investments in eco-friendly construction. This
tailored approach would accommodate both small-scale developments and ambitious city-wide initiatives,
encouraging innovation and long-term commitments to sustainable urban development.
Advantges: Attracts expertise and technologies from foreign enterprises, accelerating sustainable
building projects and urban infrastructure development.
Disadvantge: Potential short-term decrease in tax revenue, requiring careful fiscal management to
maintain funding for essential services and infrastructure.

2. “Qatar has abnormally low corporate income tax rate. Therefore, it is a Tax Haven!” Discuss whether
or not you agree with this qoute. (3 Marks)
Tax haven are jurisdictions with abnormally low corporate income tax rate (< 15%) or no corporate
income tax at all (0%) – Based on the Global Minimum Tax Rate = 15%.
Eventhough Qatar have a low corporate income tax rate of and other standard rates are10% (< 15% ),
however they are not considered a tax haven country due to its hight pertolem rates of 35% (>15%).
Therefore, Qatar isn’t a Tax haven Country.

3. Assume Nike, a US company, has a forigen branch in South Afric that earns income of $550,000 and
paid forigen income at 27%. Nike also paid sales and other taxes of $ 66,000. US coprotae tax rate is
21%.
a. Determine which of the following option is avaliable to Nike, will be selected:
i. Dedcuction of taxes?
ii. Credit approach?

Deduction Credit
Forgien Source Income 550,000 550,000
Deduction for all forgien
214,500 0
taxes paid
US taxable Income 335,500 550,000
US income tax before
70,455 115,500
credit
Forgien tax credit (for
0 148,500
income taxes paid)
Net US tax liability 70,455 0
The firm will choose Credit Method because it has lower Tax Liability.
b. Suppose that Nike wants to convert its branch in South Africe into Subsidary, give one advantage and
one disadvantge of doing so. In your opinion, when is the right time to convert?
Converting Nike's branch in South Africa into a subsidiary:
Advantage: Establishes a separate legal entity, shielding global assets from South African market risks.
Disadvantge: Converting may incur taxable gains, considered a sale, leading to immediate tax liabilities
– when selling the Branch you will incur capital gains which will be taxed (increasing your tax liability).
Right time to convert:
o When South African operation consistently profitable.
o Minimizes tax liabilities associated with conversion from branch to subsidiary.
Give one example of a progressive enviromental Tax, a regressive enviromental tax, and an enviromental
incentive as follows:

Example Reason

Progressive means the higher emission the higher rates.

Progressive
Carbon Taxes Based on poluter pay principle – the more you emit CO2 the more
Enviromental Tax
you will pay higher tax.

Regressive due to the greater financial burden on low-income

Regressive individuals than high-income groups.
Fuel/Petrol Taxes
Enviromental Tax Low income groups will have higher tax liability based on their
income and ability to pay rather than high-income groups.

When individual purchase a hybird or electric cars they will

Electric Vehicle
Tax Incentives receive a tax credit (reduce amount of their tax libaility %) which
(EV) Tax Credit
will incentives people to purchase more greener alternatives.

Complete the below Table:

Enviromental Policy Tool Example Focus

They limit access of the private vehicle to city
1. User Restrictions centers.
P Ex. Msheirb city
Regulatory Instruments
Improvement in fuels consumption can be achieved
2. Speed Limits with speeds around 100 km/hr compared to higher
speeds.
Economic Instruments To Encourage the adaption of clean energy
Subsidies
(other than Taxes) sources.
To educate shcools and universities as an additional
Infromation Instruments Education subject about fuel saving attitude.
P Ex. Zakat and Tax Accounting Course in QU.
Agreement between regulators and regulated to
Other Instruments Voulantary agreements achieve an agreed fuel-economy target.
P Ex. Paris Agreement.

1. Aggregates Levy To reduce noise, dust and damage to biodivesity.

Based on a per passenger rate:

2. Air Passenger Duty
To reduce the number of flights people take.

Enviromental Taxes Rates of tax depends on type and volume of

waste:
P To discourage businesses from using landfill by
3. Landfill Tax making it more expensive.
P To encourages businesses to look for more
environmentally friendly ways to dispose waste
such as recycling and composting.