TaxSavvyKW

Aircraft and equipment leasing under treaties

We lease equipment to a Kuwaiti company. Is the rent taxed?

The situation

Leasing net profit is taxed at 15%; some treaties exempt aircraft leasing, reviewed case by case.

The law

  • Amiri Decree No. 3 of 1955 as amended by Law No. 2 of 2008 (Income Tax Law): 15% tax on net profits of foreign corporate bodies doing business in Kuwait; Kuwaiti and GCC owned companies taxed only on their foreign ownership share

What it means for you

Net leasing profit is taxed at 15% under domestic law. KPMG notes some treaties exempt aircraft leasing, reviewed case by case. Check the treaty article for your asset type and keep lease agreements and cost records for the claim.

What to do

  1. Check treaty leasing rules.
  2. Compute net profit.
  3. Claim relief if available.
  4. Keep records.

We can do this for youTreaty relief claims in the Kuwait tax return (including India Kuwait DTAA): KWD 800

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