Kuwait’s Cabinet has endorsed a draft law to impose a 15% tax on multinational companies operating across multiple countries. The decision, made during the weekly Cabinet meeting chaired by HH Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah at Bayan Palace, aligns with global tax standards aimed at curbing tax evasion and ensuring tax revenues remain within the country.
The tax will apply to multinational entities with significant business activities in Kuwait and will come into effect on January 1, 2025, according to Deputy Prime Minister and Minister of State for Cabinet Affairs Shereeda Al-Mousherji. The Kuwait News Agency (KUNA) reported that the law is intended to combat the diversion of tax revenues to other jurisdictions while supporting global efforts to standardise corporate taxation.
This move follows Kuwait’s commitment to adopting the OECD’s global minimum tax framework, which seeks to ensure a minimum 15% effective tax rate on multinational enterprises with consolidated revenues exceeding €750 million ($800 million). Kuwait is one of the countries aligning with this initiative to promote equitable tax practices and limit aggressive tax planning by large corporations.
While further details on the implementation and enforcement mechanisms of the tax have not been disclosed, the decision underscores Kuwait’s broader efforts to diversify its economy and strengthen fiscal revenues in light of fluctuating oil prices.
The approval positions Kuwait alongside other GCC countries, such as the UAE and Saudi Arabia, which have recently introduced similar corporate tax measures. The new policy also reflects a growing regional trend toward adopting global tax standards to attract foreign investment while ensuring compliance with international regulations.
As the January 2025 enforcement date approaches, businesses are expected to seek clarity on compliance requirements, potential exemptions, and administrative processes associated with the tax.
