Income Tax

Income Tax

Income Tax

Foreign companies operating in the State of Kuwait are required to pay Income Tax at 15% of net profit for the year, which is payable to the Ministry of Finance (“MoF”) pursuant to Kuwait Income Tax Decree No. (3) of 1955, as amended by Law No. 2 of 2008, and Executive Regulations thereof.

Companies subject to the Law:

Foreign companies operating in the State of Kuwait

Added value to business entities from Income Tax Services

  • Ensure compliance with the applicable legislative and regulatory requirements in the State of Kuwait;
  • Mitigate risks of exposure to financial penalties and sanctions, thus saving relevant expenses and costs; and
  • Enhance business entity’s reputation allowing it to continue doing business in Kuwait and secure new business.

Services provided by Baker Tilly

Income Tax Declaration:

Companies regulated by the Law shall file the tax declaration as audited by an audit firm, which is registered with Tax Department, not later than the fifteenth day of the fourth month following the end of the taxable period.

In this context, Baker Tilly Kuwait provides all services related to income tax to foreign companies operating in Kuwait covering the following:

  • Tax Planning;
  • Registration with MoF with respect to income tax, and approval of the first accounting period;
  • Filing tax declarations and tax inspection;
  • Filing tax objections and appeals against decisions made by MoF;
  • No Objection Letter concerning release of tax withholding; and
  • Tax Clearance Certificate.

References:

  • Kuwait Income Tax Decree No. (3) of 1955, as amended by Law No. 2 of 2008, and Executive Regulations thereof;
  • Administrative Decision No. 875 of 2013 concerning the issuance of the executive rules and instructions of Kuwait Income Tax Decree No. (3) of 1955, as amended by Law No. 2 of 2008, as amended by Administrative Decision No. 2028 of 2015; and
  • Treaties for avoidance of double taxation between the government of the State of Kuwait and the governments of foreign countries, if any.

Other related services