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Kuwait: Pillar Two rules include transfer pricing principles aligned with OECD Transfer Pricing Guidelines

Domestic minimum top-up tax (DMTT) law formally embedded transfer pricing principles in domestic tax framework.

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april 2, 2026

The domestic minimum top-up tax (DMTT) law (Decree Law No. 157/2024), which introduced the DMTT in Kuwait effective January 1, 2025, also formally embedded transfer pricing principles within the domestic tax framework for the first time, with the regulations under the DMTT law broadly aligned with the OECD’s Transfer Pricing Guidelines.

Historically, transfer pricing in Kuwait operated within a less structured environment, with limited formal documentation requirements. The DMTT Law fundamentally changed this dynamic as transfer pricing now directly affects taxable income, effective tax rate (ETR) calculations, and potential top-up tax exposure at a global level.

Read a March 2026 report prepared by the KPMG member firm in Kuwait

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