• AMEEN ALFEQI

Taxation System

1- Kuwait Income Tax Decree No. 3 of 1955 is the only direct tax in Kuwait, and there is no taxes whatsoever on individual income except for the social insurance premium, in addition a 4% standard rate of Customs Duty is imposed on the CIF value of imported goods.

2- A higher duty applies to certain items when local production is able to meet up 40% of demand, for instance: - Turbans, towels, bed linen 10% - Carpets, tents 15% - Cement 15%



3- There is no liability to income tax arises on foreigners whose activity is confined to exporting goods to Kuwait and there is no duties on exports.

4- In Kuwait, there is no taxation on individual income. 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 GCC nationals.

5- MINISTRY OF FINANCE REGISTRATION OF COMPANIES WITH FOREIGN PARTNERS AND AGENCY AGREEMENTS

6- ALL FOREIGN CORPORATE INCOME WILL BE TAXED (individuals advantage)

7- 15% OF NET FOREIGN INCOME

8- REPATRIATION OF FOREIGN INCOME-KUWAITI PARTNERS OBLIGED TO WITHOLD 5% OF FOREIGN INCOME-RELEASE UPON ISSUANCE OF TAX CLEARANCE

9- The taxation of income in Kuwait is governed by a Decree No. 3 of 1955. According to Article 1 of this Decree a tax is imposed on every "body corporate, whenever incorporated, carrying on trade or business in Kuwait. The term "body corporate" includes any corporate carrying on trade or business in Kuwait either directly or through an agent, and also includes anybody corporate carrying on trade or business in Kuwait as an agent for others.

The income tax is computed by applying the relevant rate to whole taxable income in accordance with the bracket which the income falls, the rates of tax.

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