Taxation

Kuwait Taxation: The first income tax law in Kuwait appeared in Kuwait Income Tax Decree No. 3 for 1955 and was amended by another Decree in 1957 to redefine the taxpayer as: “ Any body corporate carrying on trade or business in Kuwait either directly or through an agent and also any body corporate carrying on trade or business in Kuwait as agent for others.” Income tax is imposed and administered under the following laws: a) Amiri Decree No. 3 of 1955 applicable to entities carrying on business or trade in Kuwait. b) Law No. 23 of 1961 applicable to the entities carrying on business or trade in the areas known as the “Specified Territory” Specified Territory consists of the partitioned neutral zone between Kuwait and Saudi Arabia and the islands of Kubr, Qaru and Umm al Maradim and their territorial waters. The Income Tax Decree No. 3 for 1955 is general in its imposition of an income tax and contains fourteen articles, which provides the basis for levy and collection of taxes. Details provisions have been provided by the Ministry of Finance in Ministerial Decrees, and in unwritten practice and precedent set by the Department on Income Taxes (DIT), which administers the law. Both the Ministry of Finance and the Tax Department enjoy substantial authority in the enforcement of the law. Individual Taxation There is no income tax in Kuwait on Individuals. Corporate Taxation For Foreign Corporate bodies owning shares in companies registered in Kuwait or Gulf Cooperation Council (GCC) countries and carrying on business or trade in Kuwait or in the areas known as the “Specified Territory”, income tax is imposed on the share of taxable profit of the Kuwaiti or GCC companies attributable to the foreign corporate bodies. Kuwait has also entered into tax treaties with several countries, for avoidance of double taxation. __________________________________________________________________________