Kuwaiti or GCC owned company and income tax

The situation

Companies wholly owned by Kuwaiti or other GCC nationals are not subject to income tax. GCC companies with foreign ownership are taxed on the foreign share.

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

No income tax arises for a fully Kuwaiti or GCC owned company. Other levies can still apply: Zakat at 1% for Kuwaiti shareholding companies, NLST at 2.5% for listed ones, KFAS for shareholding companies, and DMTT for large MNE groups. Check if any shareholder is a foreign entity through a chain.

What to do

1. Confirm the ownership chain to the end.
2. Check whether the company is a KSC.
3. Assess Zakat, NLST and KFAS.
4. Check DMTT if the group is large.

Related

• Doing business in Kuwait without a local agent
• Activities that need extra approvals in Kuwait
• Choosing between a WLL and a KDIPA entity
• Foreign ownership limit in a Kuwait WLL
• Income tax on a foreign partner's share of a Kuwait WLL
• Protecting a minority foreign partner in a Kuwait WLL