Kuwait has taken a significant step in aligning with global tax standards by approving a 15% tax on multinational companies operating across multiple countries. This new measure, set to take effect on January 1, 2025, aims to curb tax evasion and prevent the shifting of revenues to foreign jurisdictions. The decision reflects the country’s commitment to ensuring that multinational corporations contribute fairly to its national tax base.
The approval came during the Cabinet’s weekly meeting, chaired by His Highness the Prime Minister, Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah. Deputy Prime Minister and Minister of State for Cabinet Affairs, Shereeda Al-Mousherji, confirmed the resolution in a statement to the Kuwait News Agency. The initiative is part of Kuwait’s efforts to strengthen its financial framework while maintaining fairness and transparency in tax policies.
Dr. Anwar Ali Al-Mudhaf, Kuwait’s Minister of Finance and State for Economic Affairs, highlighted the importance of the new tax policy in fostering a stronger economic environment. He emphasized the significance of Kuwait’s agreement with the UAE to avoid double taxation on income and capital. This bilateral agreement aims to combat tax evasion and reflects the growing economic cooperation between the two Gulf nations. It is also expected to promote economic integration and support the free flow of capital between the UAE and Kuwait.
Dr. Al-Mudhaf further noted Kuwait’s active participation in global economic discussions, such as the 8th Arab Fiscal Forum held as part of the World Government Summit 2024. This forum serves as a critical platform for addressing global fiscal challenges and exploring future opportunities. Kuwait’s involvement underscores its dedication to contributing to solutions for global economic issues.
In a related update, the UAE Ministry of Finance announced enhancements to its tax regulations under Federal Decree-Law No. 47 of 2022. These include the introduction of a Domestic Minimum Top-up Tax (DMTT) and corporate tax incentives designed to meet OECD global tax standards. The UAE’s move aligns with the region’s broader goals of creating a fair and transparent tax system that supports sustainable economic growth.
Kuwait’s decision to introduce a 15% tax on multinationals marks a significant shift in its fiscal policy. The initiative aims to promote economic fairness, discourage tax avoidance, and reinforce the nation’s financial stability. This move not only enhances Kuwait’s global standing but also demonstrates its dedication to fostering stronger economic ties within the region and beyond.
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