TaxSavvyKW

Proposed Kuwait withholding tax

Will Kuwait start a 5% withholding tax on royalties?

The situation

The draft BPT proposes 5% WHT on dividends, royalties and technical service fees. It is not law.

The law

  • Draft Business Profits Tax Law (proposal, not enacted): Would apply 15% to a wider base with businesses under KWD 1.5 million revenue excluded, and 5% WHT on dividends, royalties and technical fees
  • Kuwait Income Tax Law: no withholding tax: Kuwait law imposes no withholding tax; dividends from listed Kuwaiti companies have been exempt since 10 November 2015

What it means for you

The draft Business Profits Tax proposes 5% WHT on dividends, royalties and technical service fees. Today Kuwait imposes no WHT. Review contracts for gross up clauses so you can respond quickly if the law passes.

What to do

  1. Do not withhold today.
  2. List affected payments.
  3. Review contracts.
  4. Watch legislation.

We can do this for youVAT and Business Profits Tax readiness review (proposals, not in force): KWD 500

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