With the UAE implementing CIT from 1 June 2023, we have entered a new era for tax in the region. Given the Kuwait CIT is likely to apply to all commercial activities with limited exclusions, this will be a paradigm shift for Kuwait businesses. Key stakeholders in Kuwait businesses will need to ensure their business and systems are ready for the introduction of CIT in Kuwait.
Background
What is Corporate Income Tax?
Corporate Income Tax, also referred to as Business Profits Tax, is a direct tax levied on the ‘taxable income’ earned by a taxable person during an annual tax period. CIT liability is generally calculated on a self-assessment basis by filing an annual CIT return which may be audited by the tax authority.
In a Kuwait context, a taxable person could include a company, an establishment, a Kuwait branch of a foreign company, an individual (with or without a commercial registration) carrying on a business.
Under the current regulations, CIT is imposed on the foreign (non-GCC) corporate bodies earning Kuwait sourced income at 15% of the net profits.
How is ‘taxable income’ calculated?
Corporate Income Tax, also referred to as Business Profits Tax, is a direct tax levied on the ‘taxable income’ earned by a taxable person during an annual tax period. CIT liability is generally calculated on a self-assessment basis by filing an annual CIT return which may be audited by the tax authority.
In a Kuwait context, a taxable person could include a company, an establishment, a Kuwait branch of a foreign company, an individual (with or without a commercial registration) carrying on a business.
Under the current regulations, CIT is imposed on the foreign (non-GCC) corporate bodies earning Kuwait sourced income at 15% of the net profits.
How to calculate taxable income?
A guidebook to understand how to calculate taxable income in Kuwait.
Our people
Zubair Patel
Head of Tax Steering Group in KPMG's CASA region and Head of Tax & Corporate Services
KPMG in Kuwait
