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Kuwait has two main tax laws to its credit. These are:-
1. Amiri Decree No.3 of 1955 which are for the
companies carrying on trade or business in Kuwait except
those covered by Law No. 23 of 1961. The tax rates under
this Law is 5% on taxable income in excess of US $
18,000 to 55% on taxable income in excess of US $
1,285,000. The Amiri Decree provides that all corporate
bodies carrying on business in Kuwait should pay tax on
the profits earned from such operations. However, no tax
is currently being imposed on Kuwaiti companies wholly
owned by Kuwaiti Nationals and companies incorporated in
the GCC wholly owned by the GCC nationals. Kuwaiti
companies incorporated outside Kuwait including GCC are
considered subject to tax in Kuwait. There is no
taxation on individuals.
2. Law No. 23 of 1961 which are applicable for
the companies carrying on trade or business in the
offshore neutral zone between Kuwait and Saudi Arabia,
islands of Kubr, Qaru, and Umm Al Maradim. The tax rates
under this Law is 20% if taxable income is up to US$
1,710,000 and 57% if income exceeds US $ 1,710,000.
Enforcement of Tax Laws
The most effective way for implementing the tax law is
the Ministerial Order 44 of 1985(M.O. 44).
Tax Treaties
Kuwait has entered into tax treaties with several
countries such as UK, Germany, Italy, Netherlands,
Switzerland etc. USA has not entered into a Tax Treaty
with Kuwait so far. |
