Closing while a tax objection is pending

The situation

Objections run on set timelines: the authority decides within 90 days and appeals go to the Tax Appeals Committee within 30 days. Clearance depends on settled liabilities.

The law

• Income Tax Law: objections and appeals: Object within 60 days of assessment; the authority decides within 90 days; appeal to the Tax Appeals Committee within 30 days
• Income Tax Law Executive Bylaws: 5% tax retention: Public and private contract owners retain 5% of each payment to contractors and suppliers until a tax clearance certificate is shown; final payment at least 5% of contract value

What it means for you

An open dispute usually blocks clearance. Decide whether to pursue the appeal or settle to close faster. Weigh the amount in dispute against retentions you cannot release until clearance.

What to do

1. Check the stage of the objection.
2. Compare dispute value to retention held.
3. Settle or pursue appeal.
4. Apply for clearance once settled.

Related

• Kuwait tax claims after closing
• Staff end-of-service on closing in Kuwait
• Keeping a Kuwait company dormant instead
• Final tax declaration on exit
• Recovering retention after leaving Kuwait
• First steps to close a Kuwait branch or company