Income Tax in Kuwait
The annual income tax as per law No. 2/2008 is imposed on each incorporated body carrying out business in the State of Kuwait and realizing income during the taxable period irrespective of its legal form, capacity of its partners, place of incorporation or nature of business.
The taxable income shall be accomplished in the State of Kuwait if it is achieved from the income or profit resulting from but not limited to the following:
- Any activities or works carried out wholly or partially in the State of Kuwait whether the respective contract is made inside or outside Kuwait as well as the income resulting from supply or sale of goods or provision of services.
- Amounts collected from the sale, lease, grant of franchise to use or utilize any trademark, design, patent, intellectual property or copyright or other immaterial rights related to intellectual property rights in consideration for the use of any copyright of literary, art or scientific works in whatever form.
- Commissions due or arising from representation or commercial brokerage agreements whether cash or real commissions.
- Profit resulting from any industrial or commercial activity in the State of Kuwait.
- Profit resulting from disposal of assets including the sale of an asset in whole or part, conveyance of its title to third parties and other acts including disposal of shares of a company whose assets are mainly immovable properties in the State of Kuwait.
- Income resulting from money lending in the State of Kuwait.
- Profit resulting from purchase and sale in the State of Kuwait of properties, goods, or related rights, whether such rights are related to a material asset or immaterial rights including the right of mortgage and franchise.
- Opening of a permanent office in the State of Kuwait where sale and purchase contracts are made. It is the place of business where activity or contracts are carried out or made whether such place is owned by the taxpayer or leased from a third party or performed at a third party’s head office.
- Profit resulting from the leasing of any property including movable and immovable properties used in the State of Kuwait.
- Profit resulting from the provision of services including fees for administrative, technical or consultancy services or contracts executed wholly or partially executed in the State of Kuwait whether made outside or inside the State of Kuwait.
However, tax amounts in accordance with this law is hereby fixed at 15% of net taxable income.
The profits of the incorporated entity resulting from trading operations within Kuwait Stock Exchange shall hereby be exempted from the tax already imposed under this law, whether it has been executed directly or via portfolios and investment funds.