Tax rates in Kuwait

Company Tax

15%

Tax Rate For Foreign Companies

Only companies with foreign ownership are subject to corporate income tax in Kuwait on their Kuwait-sourced income.
Branches are also taxed at 15%.

Capital Gains Taxation

Capital gains on the sale of assets and shares are considered ordinary income and subject to the standard tax rate of 15%. Exemptions are available for profits generated from dealing in securities on the Kuwait stock exchange.

Main Allowable Deductions and Tax Credits

Documented expenses incurred to generate or maintain an income are generally deductible.
Amortisation of tangible and intangible assets is tax-deductible at rates ranging from 4% to 33.33%. Goodwill cannot be amortised for tax purposes.
Start-up fees incurred before the signing of a contract are not eligible for a deduction. Interest charges are only deductible if they relate to transactions in Kuwait and are paid to a local bank.
Bad debts may be deducted if they relate to transactions in Kuwait and a final decision is made by a court of competent jurisdiction over the dispute.
Donations to recognised Kuwaiti charitable organisations are deductible.
Head office expenses are deductible up to 1.5% of income earned in Kuwait after deducting any share of subcontractors. Payments made by the head office to foreign subsidiaries for the supply of goods, design costs and consulting services are also deductible. Provided certain conditions are met, subcontract costs can be deducted.
Tax losses can be carried forward for up to three years. The carryforward of losses is prohibited in the following cases: 1) the tax return does not include any income earned in Kuwait; 2) change in the legal structure of the company; 3) the merger of the company with another entity; 4) liquidation or disposal of the business in Kuwait. The carryback of losses is prohibited.

Other Corporate Taxes

Social security contributions payable by the employer amount to 11.5% of salary (capped at KWD 2,750 per month). Employers are not required to contribute to the social security scheme for their expatriate employees.
Publicly-traded corporations pay an employment support tax of 2.5% of their net profits to support employment in the private sector.
Kuwaiti joint-stock companies (listed and unlisted) pay 1% of their net profit to pay the Zakat (religious tax) or contribute to the state budget. They are also liable for a tax equal to 1% of their profit (after the transfer of reserve funds and carryforward of tax losses) to finance the Kuwait Foundation for the Advancement of Sciences.
Payments from a contractor/subcontractor that are yet to settle their tax liabilities with Kuwaiti authorities and obtain a certificate should be withheld at a rate of 5%.
No property or transfer taxes are levied in Kuwait.

Other Domestic Resources

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

Not applicable

Special Expatriate Tax Regime

Not applicable