The Cabinet of Kuwait recently passed a bill calling for the imposition of 15% Corporate Tax on business entities in Kuwait that operate simultaneously in multiple global jurisdictions.
The draft-decree law has been formulated in sync with existing global tax regulations in a move aimed to boost Kuwaiti economy and international trade amongst participating entities. Kuwait, much like most of the countries in the middle-east region has had a tax-friendly status, not levying personal income tax or general corporate tax on local Kuwaiti companies.
Historically, tax in Kuwait has been governed by the Kuwait Income Tax Decree of 1955 which imposed tax on foreign companies operating in Kuwait, particularly in the prominent oil and gas sector. Initially, taxes as high as 55% was levied on such companies, which were later reduced over time owing to revenue diversification and continued foreign investments.
Raise Funds Smarter – Your Guide to SME IPO Success- Click here to enroll
On December 25, 2024, the Kuwaiti Cabinet endorsed a draft resolution imposing a 15% tax on multinational entities operating in more than one country or state. This decision was announced during a meeting held at Bayan Palace under the chairmanship of His Highness the Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah.
The 15% tax minimum tax on multinational entities reaffirms Kuwait’s commitment towards the Organization for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) standards and shall ensure that multinational corporations pay a proportional share of taxes in all the jurisdictions where the operate and generate revenue.
Raise Funds Smarter – Your Guide to SME IPO Success- Click here to enroll
While tax reforms are infrequent in the region, the new law is touted to curb tax evasion and disproportionate transfer of revenue generated in Kuwait to other countries. Deputy Prime Minister and Minister of State for Cabinet Affairs Shereeda Al-Mousherji has informed Kuwait News Agency that the law shall come into effect as early as January 1, 2025.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
