Kuwait City: Minister of Finance, Minister of State for Economic Affairs and Investments Nora Al-Fassam announced that her department is preparing a selective taxation law aimed at commodities harmful to human health, with expectations of generating KD 200 million (USD 648.3 million) annually.
According to Kuwait News Agency, Al-Fassam, in an exclusive interview, discussed upcoming steps in reforming Kuwait’s taxation system, including corporate income taxes. She highlighted decree-into-law 6/2024 on the Exchange of Information for Tax Purposes and decree 157/2024 on taxation of multinational entities as pivotal measures.
Kuwait joined the Organization for Economic Cooperation and Development/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on November 15, 2023. Since joining, Kuwait has been working to address international tax evasion and promote a transparent taxation environment through various reforms.
Al-Fassam also mentioned treaties on double taxation, combating financial evasion, and agreements for investment protection as part of the reforms. The minister clarified that entities taxed under decree-into-law 157/2024 will not pay levies for workers as per law 19/2000, nor alms contributions as per law 46/2006 for the period starting January 1st.
The taxation law for multinational entities exempts some government entities, non-profit organizations, international agencies, and investment funds. Estimated annual revenue from these fees is KD 250 million (USD 810.6 million), with implementation expected in the 2027-2028 period.
Approximately 300 groups will be subject to this tax, including 20 Kuwaiti and 25 Gulf groups, with the remainder being foreign entities operating in Kuwait. This tax aligns with Kuwait’s Vision 2035, which aims for a diversified and sustainable economy by increasing non-oil revenues and preventing financial outflows to other countries.
Minister Al-Fassam emphasized that the new tax measures will enhance Kuwait’s role in international tax cooperation and promote equitable taxation practices.