KPMG in Kuwait provides updates on procedures related to tax cards, the filing of tax declarations and applications for investment promotion incentives.
On 1 January 2017, the Ministry of Finance (MOF) amended the rules4 regarding tax cards issued to foreign companies that are subject to Corporate Income Tax (CIT) in Kuwait. Changes to the rules are as follows:
The MOF also cancelled a rule5 that required public and closed Kuwaiti shareholding companies to apply for tax cards for Zakat and the National Labor Support Tax (NLST) purposes. Accordingly, tax cards will no longer be issued to Kuwaiti companies.
Where a Kuwaiti company has a foreign shareholder that is subject to CIT, the foreign shareholder should apply for a tax cards for corporate income tax, as discussed above.
For CIT, Zakat and NLST declarations filed as of January 2017, the MOF has requested all taxpayers to provide a summarized tax form of the declarations electronically (i.e., on a CD), in addition to filing a hard copy of tax declaration with the MOF as usual. Some procedural aspects of these requirements are not yet clarified. These requirements suggest that the MOF may be looking to implement an electronic filing system and is starting to gather data for this purpose.
The Kuwait Direct Investment Promotion Authority (KDIPA) recently updated certain forms and procedures for applications for investment structures, including the list of documents required when submitting applications.
KDIPA also introduced an option for investors to apply for a 100-percent foreign- (non-GCC-) owned Kuwaiti entity without incentives. KPMG in Kuwait understands from KDIPA that this option would allow for greater than 49-percent foreign ownership in cases where an investor’s project does not fully qualify for the investment tax incentives (i.e. tax holiday and customs exemptions).
This area is quite new and needs to be tested as the absolute minimum requirements for KDIPA are unclear.
4 Executive Rule No. 3 relating to Law No. 2 of 2008.
5 Executive Rule No. 3 of both Law No. 46 of 2006 and Law No. 19 of 2000.