Kuwait

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The tax rate is progressive on 11 brackets from 0 to 55%. It affects only foreign companies. Within the framework of a joint-venture, the initial foreign contracting party will be subjected to the corporate tax in proportion to its contribution in capital.
of 0 to 5 250 KD: 0%
of 5 250 to 18 750 KD: 5%
of 18 751 to 37 500 KD: 10%
of 37 501 to 56 250 KD: 15%
of 56 251 to 75 000 KD: 20%
of 75 001 to 112 000 KD: 25%
of 112 001 to 150 000 KD: 30%
of 150 001 to 225 000 KD: 35%
of 225 001 to 300 000 KD: 40%
of 300 001 to 375 000 KD: 45%
Beyond 375 000 KD: 55%.

   
Tax rate on long-term capital gains Capital gains are considered as normal business profits and are subject to tax at the normal rates.
   
System governing groups of companies and dividends paid by subsidiaries to their parent companies Dividends are not taxed in Kuwait.
   
Tax rate on branches The Corporate tax is levied on branches in Kuwait in the same way as any others companies.




Income tax

   
Income tax rate Generally, individuals (residents, non-residents) are not taxed in Kuwait, but a project of levy was presented to the National Assembly.
The tax schedule varies between 5 and 30% shared out into 6 brackets:
From 0 to 2 000 KD: 5%
From 2 001 to 10 000 KD: 10%
From 10 001 to 50 000 KD: 15%
From 50 001 to 250 000 KD: 20%
From 250 001 to 100 000 KD: 25%
Beyond 1 million KD: 30%.
   
Tax deductions or other allowances The fixed deductions foreseen within the framework of the project of levy are as follows:
Fixed deduction of 6 000 KD for single people.
7000 KD for married people without dependent children.
8400 KD for the couples married with a dependent child.
600 KD for every dependent child.



VAT rates

Standard rates There is no VAT in Kuwait.
   
Reduced rates No reduced rate.



 

Accounting

Introduction
According to the ministerial order n206 of 1985, any company with commercial character is subjected to a certain number of information obligations. The accrual method is the book-keeping system used.


Obligations and publications
All commercial companies of Kuwait have to establish annually some accounting documents which must be drafted in Arabic:
- The account book
- The inventories book
- The expenditures analysis book
- The stocking evolution book.
To realize a financial analysis, companies have to set up a balance sheet and a profit and loss account, then subject it to the Department of Trade and Industry for agreement within 3 months following the end of the social year.

Certification and auditing
The certification and the control of accounts has to be made by means of an independent body of the company, guaranteed and registered to the Department of Trade and Industry. The activity of certification and control of accounts is governed by the Law n5 of 1981.

Professionals and representative organizations
The "Kuwait Association of Accountants and Auditors" ( 530 members).



Useful links
For further information, please contact the Ministry of Finances of Kuwait.

Last modified in 2006 - ongoing update
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