Arab Times, 15 January 2025: The Finance Ministry is preparing a selective taxation law aimed at commodities detrimental to human health, with expected annual revenues of KD 200 million (USD 648.3 million).

It was revealed that a significant step in Kuwait’s tax reform is the introduction of corporate income taxes.

This includes Kuwait Decree-Law No. 6/2024 for the Exchange of Information for Tax Purposes and Kuwait Decree No. 157/2024 for taxation on multinational entities.

Kuwait joined the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on November 15, 2023, which includes 140 countries and jurisdictions.

Since then, efforts have been made to combat international tax evasion and promote transparency in taxation.

Key reforms include treaties on double taxation, combating financial evasion, and agreements for investment protection, alongside ratifying international taxation cooperation treaties.

Entities subject to Kuwait Decree No. 157/2024 are exempt from certain levies, such as those for workers under Kuwait Law No. 19/2000 and alms under Kuwait Law No. 46/2006.

Companies contributing to the Kuwait Institute for Scientific Research will continue their payments, as no exemptions are mentioned in the decree.

Exemptions from the multinational taxation law include some government entities, non-profits, international agencies, and pension and investment funds.

Projected revenues from fees on multinational entities are estimated at KD 250 million (USD 810.6 million) annually, with enforcement set for the 2027-2028 period.

Approximately 300 groups, including 20 Kuwaiti and 25 Gulf groups, will be subject to this tax, with the remainder being foreign entities operating in Kuwait.

This tax enforcement aligns with Kuwait Vision 2035, aiming for a diversified and sustainable economy.

The proceeds will help diversify non-oil revenues and prevent financial outflows to other countries, enhancing Kuwait’s role in international cooperation for fair taxation practices.

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