Tax
Tax on foreign corporate profit only, with no VAT
Corporate income tax at fifteen per cent applies only to foreign-owned corporate profit. There is no personal income tax and no VAT.
Key rules
- Jurisdiction — Department of Income Tax, Ministry of Finance. Objections go to the tax authority then to the courts.
- Deadline — 3.5 months after the end of the tax period to file, extendable
- Deadline — Retention of 5% of contract payments pending tax clearance
Governing law
- Income Tax Decree 3 of 1955, as amended by Law 2 of 2008 — 15% flat rate
- Law 46 of 2006 on Zakat and Contribution to the State Budget
- National Labour Support Tax, Law 19 of 2000
In practice
Only the foreign corporate share of profit is taxed, so a wholly Kuwaiti-owned company pays no income tax and instead faces zakat at one per cent and, if listed, the labour support tax. The contract retention rule is the practical trap for foreign contractors: counterparties must withhold five per cent of payments until a tax clearance certificate is produced, which affects cash flow on every project. Kuwait signed the GCC VAT framework but has not implemented VAT and repeatedly deferred it, so it remains one of the two GCC states without it.