Tax in Kuwait
Kuwait charges a flat 15% on the profit of foreign-owned business. Kuwaiti and GCC-owned shares are outside that tax. Kuwait has no VAT and no personal income tax. Kuwait has no withholding tax on dividends, interest or royalties. Government entities hold back 5% of each contract payment until a tax clearance certificate is shown.
Key facts
- Corporate income tax
- 15% flat on the profit of foreign-owned entities and foreign companies with Kuwait-source income. Kuwaiti and GCC-owned shares are outside it
- Domestic minimum top-up tax (DMTT)
- 15% effective minimum for groups with consolidated revenue of EUR 750 million in at least two of the four preceding years. Periods from 1 January 2025
- Tax retention
- 5% of each contract payment, held back by government entities until a tax clearance certificate is shown. It is not a withholding tax
- Withholding tax
- None on dividends, interest or royalties
- Zakat
- 1% of net profit, Kuwaiti public and closed shareholding companies only
- VAT
- None
- Customs duty
- 5% of CIF value under the GCC common external tariff. Higher on tobacco
- Tax treaty
- Of Norway, Sweden, Finland and Denmark, only Denmark has a tax treaty in force with Kuwait, from 2 October 2013. Limits under the treaty with Denmark: dividends 0%, 5% or 15%, interest taxed only in the recipient's state of residence, royalties 10% of the gross amount
On this page
01Corporate income tax
Kuwait taxes foreign-owned business profit at a flat 15% under Decree 3 of 1955. Companies wholly owned by Kuwaiti or GCC nationals are outside the tax.
| Rule | What applies |
|---|---|
| Rate | 15% flat |
| Base | Profit and capital gains from business done in Kuwait, directly or through an agent |
| Who pays | Foreign companies and branches with Kuwait-source income, and the foreign-owned share of a Kuwaiti company. A GCC company with foreign owners pays on the foreign share |
| Branches | Branches pay the same 15% as companies |
| Contracts partly done outside Kuwait | The whole contract revenue is reportable |
| Exempt | Dividends from Kuwait Stock Exchange (KSE) listed companies declared after 10 November 2015. Profits from dealing in KSE-listed securities. Foreign principals selling through Kuwaiti distributors |
| Capital gains | Gains on shares and assets sold by foreign shareholders are ordinary business profit taxed at 15% |
| Royalties | Taxed on a deemed profit of 98.5% of the gross amount. The other 1.5% is treated as a head office overhead allowance |
| Interest | Interest from a Kuwaiti source is taxable for foreign entities |
| Deductions | Provisions are not deductible, only realised costs. Unrealised exchange losses are not deductible |
| Transfer pricing and thin capitalisation | Transfer pricing follows Executive Rule 49 (arm's length). Thin capitalisation follows Executive Rule 38, with no fixed debt to equity ratio. Kuwait has no controlled foreign company rules |
| Tax holiday | KDIPA can exempt a licensee from income tax and other taxes for up to ten years from actual start of operations |
Sources PwC Tax Summaries, Kuwait, Taxes on corporate income, reviewed 22 July 2026 · PwC Tax Summaries, Kuwait, Income determination, reviewed 22 July 2026 · PwC Tax Summaries, Kuwait, Group taxation, reviewed 22 July 2026 · PwC Tax Summaries, Kuwait, Branch income, reviewed 22 July 2026 · PwC Tax Summaries, Kuwait, Tax credits and incentives, reviewed 22 July 2026 · US State Department, 2026 Investment Climate Statement, September 2026 · Chambers, Doing Business In 2026, Kuwait, 2026
02Filing and payment
The return is due within three months and 15 days of the year end. Tax is paid in four equal instalments.
- The return is supported by audited accounts.
- An extension of up to 60 days can be requested.
- The four equal instalments fall on the 15th of the 4th, 6th, 9th and 12th months after year end.
- Late filing or payment costs 1% of the tax for each 30 days.
- The limitation period is five years.
Sources PwC Tax Summaries, Kuwait, Tax administration, reviewed 22 July 2026 · Chambers, Doing Business In 2026, Kuwait, 2026
03Tax retention
Kuwaiti government entities hold back 5% of each contract payment. The retention is not a withholding tax.
- The money is released when the recipient produces a tax clearance certificate from the Ministry of Finance.
- The Budget Executive Regulations for FY 2026/2027, issued by the Ministry of Finance on 29 March 2026, say the retention is not applied to an entity that is inside the DMTT regime and compliant with its tax obligations.
Sources KPMG Kuwait, Tax alert on the 5 percent tax retention, April 2026 · PwC Tax Summaries, Kuwait, Taxes on corporate income, reviewed 22 July 2026
04Withholding tax
Kuwait has no withholding tax on dividends, interest or royalties.
Sources PwC Tax Summaries, Kuwait, Withholding taxes, reviewed 22 July 2026
05Zakat and other levies
Zakat is 1% of net profit and applies to Kuwaiti public and closed shareholding companies only. Two further levies apply to Kuwaiti companies.
| Levy | Rate | Who pays |
|---|---|---|
| Zakat (Law 46/2006) | 1% of net profit | Kuwaiti public and closed shareholding companies |
| KFAS contribution | 1% of net profit after the statutory reserve transfer and loss offset | All Kuwaiti shareholding companies |
| National Labour Support Tax, NLST (Law 19/2000) | 2.5% of net annual profit | Kuwaiti companies listed on the KSE |
WLLs and branches do not pay zakat, KFAS or NLST.
Sources PwC Tax Summaries, Kuwait, Other taxes, reviewed 22 July 2026 · PwC Tax Summaries, Kuwait, Taxes on corporate income, reviewed 22 July 2026 · Chambers, Doing Business In 2026, Kuwait, 2026
06Domestic minimum top-up tax
The DMTT is a 15% effective minimum tax for in-scope groups. It applies to tax periods starting on or after 1 January 2025.
- Law: Decree-Law 157 of 2024, issued 30 December 2024. Executive Regulations: Ministerial Resolution 55 of 2025, issued 30 June 2025.
- Scope: Kuwaiti groups and foreign groups with Kuwaiti entities or permanent establishments, where consolidated group revenue reached EUR 750 million in at least two of the four years before the period.
- Rate: 15% minus the entity's effective tax rate where that is below 15%. The rules follow the OECD GloBE model.
- Taxes replaced: an in-scope group no longer pays the 15% corporate tax, the neutral zone corporate tax (Law 23/1961), NLST or zakat. The DMTT is its Kuwaiti profit tax. The KFAS contribution is not replaced.
- Registration: by 30 September 2025 for groups in scope on 1 January 2025. Later entrants register within 120 days.
- Return: within 15 months of period end, with accounts audited by a Ministry of Finance accredited firm.
Penalties
| Breach | Penalty |
|---|---|
| Late filing | 5% of the final tax if up to 30 days late. 10% for 31 to 90 days. 15% for 91 to 365 days. 20% beyond 365 days |
| No return by the assessment date | 25% penalty |
| Minimum late filing penalties | KWD 1,000 before assessment. KWD 5,000 for the 25% penalty |
| Late payment | 1% of unpaid tax for every 30 days or part of 30 days |
| Incorrect return | 25% of the difference where it exceeds 10% of the final tax. Reduced to 10% if corrected before the tax administration finds the error |
Sources PwC Tax Summaries, Kuwait, Group taxation, reviewed 22 July 2026 · PwC Middle East, Recent Pillar Two developments in Kuwait, 3 July 2025 · KPMG Kuwait, Domestic minimum top-up tax, January 2025 · Al Tamimi, Kuwait 2026: The Strategic Shifts Investors Need to Watch Now, 2026
07VAT
Kuwait has no VAT.
Sources PwC Tax Summaries, Kuwait, Other taxes, reviewed 22 July 2026 · US State Department, 2026 Investment Climate Statement, September 2026 · Chambers, Doing Business In 2026, Kuwait, 2026
08Excise tax and other transaction taxes
Kuwait has no excise tax.
Kuwait levies no stamp duty, transfer tax or property tax.
Sources PwC Tax Summaries, Kuwait, Other taxes, reviewed 22 July 2026 · US State Department, 2026 Investment Climate Statement, September 2026
09Customs duty
Kuwait applies the unified GCC tariff of 5% on the CIF invoice value of imports.
- Tobacco and some other items carry higher rates. Exceptions exist for specific goods.
- KDIPA can grant full or partial exemption from duty on raw materials, machinery, equipment, vehicles, spare parts and intermediate goods needed for a licensed project. The fee for the exemption certificate is KWD 30.
- Items imported under the exemption cannot be sold or put to other use for five years from the exemption notice.
Sources PwC Tax Summaries, Kuwait, Other taxes, reviewed 22 July 2026 · KDIPA, Frequently Asked Questions · Chambers, Understanding the KDIPA licence in Kuwait, 31 July 2025
10Personal income tax
Kuwait has no personal income tax.
Sources PwC Tax Summaries, Kuwait, Individual, Other taxes, reviewed 22 July 2026 · US State Department, 2026 Investment Climate Statement, September 2026
11Tax treaties with Norway, Sweden, Finland and Denmark
Denmark is the only one of the four countries with a double tax treaty in force with Kuwait.
| Country | Double tax treaty | Investment treaty |
|---|---|---|
| Denmark | Yes. Signed 22 June 2010. In force 2 October 2013 | Yes. Signed 1 June 2001. In force 29 June 2002 |
| Finland | No | Yes. Signed 10 March 1996. In force 21 May 1997 |
| Norway | No | No |
| Sweden | No | Yes. Signed 7 November 1999. In force 10 May 2002 |
Treaty terms with Denmark
| Item | Treaty rule |
|---|---|
| Application | To withholding taxes on amounts paid or credited from 1 January 2010. To other taxes for tax periods beginning on or after 1 January 2011 |
| Dividends | 0% source-state tax where the owner is a company holding at least 25% of the paying company's capital for an uninterrupted year, or a government body. 5% for pension institutions. 15% in all other cases |
| Interest | Interest is taxable only in the recipient's state of residence |
| Royalties | Limited to 10% of the gross amount |
| Kuwaiti withholding tax | Kuwait itself levies none |
| Foreign tax credit | Available for taxes paid in a treaty country, up to the Kuwaiti tax on that income |
Norway, Sweden and Finland
There is no double tax treaty between Kuwait and Norway, Sweden or Finland.
Sweden and Norway each have a separate 1977 exchange of notes with Kuwait, in force 27 February 1977. It exempts international air transport enterprises from tax on income and capital. It is not a general tax treaty.
Other agreements
- Kuwait and the EFTA states, which include Norway, are both parties to the EFTA-GCC free trade agreement, in force since 1 July 2014. It is a trade agreement and gives no income tax relief.
- Kuwait approved accession to the OECD multilateral instrument (MLI) by Decree 62 of 2026, in force 7 June 2026.
Sources Retsinformation, Lov om dobbeltbeskatningsoverenskomst mellem Danmark og Kuwait (Law 378 of 2 May 2011, with the convention text), 2 May 2011 · Lovguiden, Convention Article 29 · Orbitax, Treaty between Denmark and Kuwait enters into force · PwC Tax Summaries, Kuwait, Withholding taxes, reviewed 22 July 2026 · Vero Skatt, Voimassa olevat verosopimukset (updated 1 September 2026) · OECD, BEPS MLI position of Denmark, list of covered tax agreements (Kuwait: signed 22 June 2010, in force 2 October 2013) · Finlex, Tuloverosopimukset · Regeringen.se, Overenskommelse med Kuwait angaende omsesidig skattebefrielse for luftfartsforetag · FAR Online, Dubbelbeskattningsavtal, Kuwait · Regjeringen.no, Profits from shipping, airtransport and ground transportation · Orbitax, Norway negotiating tax treaties, 22 June 2017 · UNCTAD Investment Policy Hub, Kuwait · UNCTAD Investment Policy Hub, Norway · EFTA, Gulf Cooperation Council (GCC) · KPMG US, Kuwait approval of accession to the MLI, 22 June 2026 · PwC Tax Summaries, Kuwait, Tax credits and incentives, reviewed 22 July 2026
What changed
- 7 June 2026Decree 62/2026, approving accession to the OECD multilateral instrument, came into force. The approval was dated 25 May 2026.
- 29 March 2026The Ministry of Finance Budget Executive Regulations for FY 2026/2027 set how the 5% retention interacts with the DMTT. The retention is not applied to an entity inside the DMTT regime and compliant with its tax obligations.
- 30 September 2025DMTT registration deadline for groups in scope on 1 January 2025.
- 30 June 2025DMTT Executive Regulations were issued (Ministerial Resolution 55/2025).
- 1 January 2025The DMTT applied to tax periods starting on or after this date.
- 30 December 2024Decree-Law 157/2024 introduced the DMTT.
This page is general information, not legal or tax advice.