Kuwait To Levy 10pc Corporate Income Tax

by Lorys Charalambous, Tax-News.com, Cyprus

17 March 2016

Kuwait's Cabinet has approved a proposal to levy a 10 percent tax on corporate profits, Finance Minister Anas Al Saleh said at a press conference on March 14, 2016.

The proposed measure is intended to rein in a deficit that is expected to reach around KWD12bn (roughly USD40bn) in the coming fiscal year.

Kuwait and the other Gulf Cooperation Council (GCC) countries – Bahrain, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – have been jointly considering introducing a pan-GCC value-added tax (VAT) to diversify their tax bases away from oil revenues. The United Arab Emirates has now confirmed that it will introduce its own regime from 2018 and the other GCC states are expected to soon official confirm similar plans, for a five percent rate, introduced in the same year.

At the end of last year, the International Monetary Fund welcomed Kuwait's plan to tax business profits. It also urged the country to redouble efforts to prepare for the introduction of the VAT.

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