UAE and Kuwait to Start 15% Minimum Tax on Multinational Companies from January 1 as Part of Diversification Plans
Starting January 1, 2025, Kuwait will introduce a 15% tax on multinational companies. This move follows other Gulf Cooperation Council (GCC) countries as part of efforts to increase income from sources other than oil.
New DMTT Tax
The new tax is part of a global agreement led by the Organization for Economic Cooperation and Development (OECD) to ensure big companies pay at least 15% tax and make it harder for them to avoid taxes. The domestic minimum tax (DMTT) has been agreed upon by 136 countries, including the UAE.
On Monday, Kuwait’s Finance Minister, Noora Sulaiman Al-Fassam, announced the additional DMTT for multinational companies operating in multiple countries.
This law, introduced under decree 157 of 2024, is part of Kuwait’s Vision 2035, which aims to create a more diverse and sustainable economy. The tax aligns with the OECD’s Pillar II framework.
“Our economy is undergoing major changes to become more diverse and competitive. These reforms will improve the business environment, attract investments, and create jobs,” said Al-Fassam.
The finance ministry said it will work closely with affected companies, hold workshops and meetings to explain the changes, and issue detailed rules soon to guide the tax’s implementation.
Cabinet Approval
Last week, the Kuwaiti Cabinet approved a new draft law during their weekly meeting. This law will tax businesses that operate in more than one country or state. It follows international rules to reduce tax evasion and stop companies from shifting tax revenues to other countries, according to the Kuwait News Agency (KUNA).
Similar Taxes
Earlier this month, the UAE introduced a 15% tax on large multinational companies starting in January. Bahrain also announced plans for a 15% minimum tax on big multinational companies. This tax will apply to companies earning at least $780 million (€750 million) in global revenue.
Published: 31th December 2024
For more article like this please follow our social media Twitter, Linkedin & Instagram
Also Read:
Foreign investments in Saudi Arabia fell 24% in Q3 2024
Bedaya issues $35M securitized bonds with EFG Hermes’ advice
Sheraton Jumeirah Beach Resort: A Perfect Place for a Vacation
