Kuwait reveals new tax rules, economy boost anticipated

Kuwait announced executive regulations for its tax on multinationals in the nation and expects this will bring 250 million Kuwaiti dinars in revenues per year, The National reported on July 2nd.

The country’s Ministry of Finance states that the new regulations elucidate details about the introduction of a supplementary domestic minimum tax (DMTT) under its multinational entities (MNEs) group tax.

The ministry states they “aim to interpret and clarify the provisions of the law, define procedures and implementation mechanisms, enhance transparency, and provide a clear understanding for relevant parties in line.”

Although the tax rate was not specified, the country states that in December that the ministry was intending to enforce a 15% tax on multinationals within the nation.

This legislation presents Kuwait’s objective of broadening revenues away from the oil sector, according to Noura Sulaiman Al-Fassam, Minister of Finance and Minister of State for Economic Affairs and Investment.

These regulations ‘”represents a major milestone in the path of economic reform, given their role in providing a fair investment environment enhancing tax justice’” the minister stated.

Furthermore, she adds that the preliminary estimates indicate that the expected annual revenues from the tax could reach about 250 million Kuwaiti dinars, “enhancing the state’s ability to build a resilient and sustainable economy.”

Kuwait’s domestic minimum tax applies to multinational entities; Kuwaiti or foreign companies operating in more than one country “whose total revenues meet or exceed annual revenues of €750 million in the consolidated financial statements of the parent entity for at least two of the four tax periods immediately preceding full year 2025” according to the consultancy KPMG. The consultancy urges the multinational entities to register by September 30th 2025.

The domestic minimum tax is in line with the Organisation for Economic Co-operation and Development’s Pillar Two programme, which has created an international minimum corporate tax to make sure big multinational enterprises pay a minimum of 15% tax on profits in each country where they operate their business.

The proposed international minimum tax is estimated to lead to yearly international revenue gains of roughly $220 billion or 9% of international corporate income tax revenue.

The National