Kuwait has unveiled executive regulations regarding its tax on multinational entities, anticipating that the levy will generate KWD250 million ($81.2 million) in annual revenues. The country’s Ministry of Finance stated that the new regulations outline the introduction of a supplementary domestic minimum tax (DMTT) under the multinational entities (MNEs) group tax.
These regulations “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,” the ministry announced earlier this week.
While the tax rate has not been specified, the country indicated in December that it plans to impose a 15 percent tax on multinationals operating within its borders. This new legislation aligns with Kuwait’s strategy to diversify its revenue sources away from the oil sector, according to Noura Sulaiman Al-Fassam, minister of Finance and minister of State for Economic Affairs and Investment.
The issuance of these regulations “represents a major milestone in the path of economic reform, given their role in providing a fair investment environment and enhancing tax justice,” she remarked. Preliminary estimates suggest that the anticipated annual revenues from the tax could reach approximately KWD250 million, “enhancing the state’s ability to build a resilient and sustainable economy.”
Registration deadline
Multinational entities are required to register by September 30 of this year.
The DMTT aligns with the Organisation for Economic Co-operation and Development’s Pillar Two programme, which establishes a global minimum corporate tax to ensure that large multinational enterprises pay at least a 15 percent tax on profits in each country where they operate. The proposed global minimum tax is anticipated to yield annual global revenue gains of about $220 billion, or 9 percent of global corporate income tax revenue, according to the OECD in 2023.
Oman is set to become the first in the region to introduce personal income tax starting in 2028. The Personal Income Tax Law, introduced last month, imposes a 5 percent tax on annual income exceeding OMR42,000 ($109,229), as reported by the Oman News Agency. The law will tax income derived from “specific income types as defined by the law,” the news agency stated.
