Kuwait, UAE Sign Double Taxation Agreement
Organized By: Al Arabiya News
External URL: https://bit.ly/3HVnUbv
Kuwait City February 11 2024:
Kuwait and the United Arab Emirates have signed an agreement to avert double taxation between the two countries, Kuwait News Agency (KUNA) reported.
In its statement, Kuwait’s Ministry of Finance said the final agreement between the two regarding taxes on income on capital and to prevent tax evasion and avoidance had been signed.
Kuwait keen on Introducing Excise Taxes instead of VAT
Organized By: Kuwait Times
Kuwait City August 16 2023:
The Kuwait Government said the application of value added tax in Kuwait during the current circumstances will be widely rejected at the parliamentary levels.
The government has excluded it from its plans during the next three years at least, indicating it will resort to the application of excise tax instead of VAT as its first choice for tax collection.
Sources reveal that “The application of excise tax will include tobacco and its derivatives, soft and sweetened drinks and luxury goods such as watches, jewelry and precious stones, as well as luxury cars and yachts.” The value of the proposed tax on these goods will range between 10 and 25 percent.
Sources added that the government wants to apply VAT in accordance with its agreement with Gulf Cooperation Council countries, but it must be approved by the National Assembly, which is currently difficult in light of popular and parliamentary rejection.
Kuwait: KD 900M Collected in Taxes during Past 5 Years
Organized By: Arab Times
Kuwait City January 4, 2023:
The Kuwaiti government collected about 900 million dinars in taxes from companies during the past five years, from April 2017 until the end of March 2022.
The total taxes were 787.6 million dinars, which came in the form of income tax from foreign companies and from Kuwaiti companies to support employment, zakat proceeds from Kuwaiti companies, and companies’ contributions to state services, in addition to about 110 million dinars from profits distribution and revenues for issuing tax certificates or others.
The data disclosed fiscal 2018/2019 witnessed the highest rate of collection of taxes on income, profits, and capital gains from companies and other projects, during which they collected 181.3 million dinars, in addition to a non-recurring rate of ‘dividend profits’ of about 109.94 million dinars, which is equivalent to the value of income tax from foreign companies for the same year bringing the total collection to 291.2 million dinars.
READ ALSO : No New New Taxes Eyed in Kuwait
UAE and Kuwait Sign Double Tax Treaty
Organized By: Kuwait MoF
External URL: https://twitter.com/MOFKW/status/1564542419823198208
Kuwait City September 4, 2022:
Kuwait and the United Arab Emirates (UAE) have recently signed a treaty for the avoidance of double taxation, as announced by the the Kuwait Ministry of Finance on Twitter.
This is the first tax treaty that Kuwait has signed with a Gulf Cooperation Council member state. The objectives of the tax treaty are to expedite cooperation in tax matters, strengthen ties between the two countries and unite the economic and investment partnerships in the region.
This move is in line with the efforts of both countries to grow commercial trading, boost investment opportunities, enhance development goals and also provide full protection of goods and services exchanged in both the countries.
A Selective Tax system to be implemented in Kuwait
Organized By: Gulf News
Kuwait- March 24, 2022:
Due to high inflation rates and turmoil in global markets, both the national assembly and the people of Kuwait are likely to reject the VAT system in future. Hence the Kuwaiti government has deferred its plans to implement value-added tax (VAT) any time soon.
However, Kuwait is contemplating a move towards the implementation of a selective taxation system ranging from 10 to 25 percent. This excise tax will cover tobacco products, sweetened drinks, expensive goods such as watches, jewelry and precious stones as well as luxury cars and yachts, instead of VAT.
Sources expect that the selective tax will fetch around 500 million dinars annually to the government.
Kuwait’s MPs against Imposing Taxes to address Budget Deficit
Organized By: Arabian Business
Kuwait- January 17, 2022:
During the National Assembly’s session, MPs in Kuwait have strongly refused economic reforms that would involve imposing taxes on citizens in the country to address the budget deficit.
According to a state-run news agency, a number of politicians called for solutions to address the country’s budget deficit –A record KD10.8 billion ($36bn) deficit in 2020, up 175 percent from a year earlier.
During the session, the MPs affirmed the need to allow the oil sector to rely on other oil-related substances to create multi-income sources. However, it was emphasized that this solution shouldn’t be touching upon taxation.
Presently, Kuwait does not impose income tax on income earned by individuals. However, companies in the region pay 4.5 percent of their net profits, that includes zakat and labor support and a contribution to the Foundation for the Advancement of Sciences.
Kuwait likely to implement VAT
Organized By: Arab Times
Kuwait – August 23, 2021:
Kuwait will most likely implement the Value Added Tax (VAT) either this year or by next year cites the latest World Bank report on the economies of the member-nations of the Gulf Cooperation Council (GCC).
The World Bank also predicted that the economy of Kuwait will increase by 2.4 percent within 2021; followed by a projected 3.2 percent growth in the next two years — 2022 and 2023.
The projections for Kuwait on the following economic indicators are:
- Real Gross Domestic Product (GDP), percent change: 2.4 in 2021, 3.6 in 2022 and 2.8 in 2023
- CPI inflation rate, percent average: 2.0 in 2021, 2.3 in 2022 and 2.5 in 2023
- Government Revenues, percent GDP: 29.8 in 2021, 31.7 in 2022 and 42.1 in 2023
- Government Expenditures, percent GDP: 52.5 in 2021, 51.0 in 2022 and 50.4 in 2023
- Fiscal Balance, percent GDP: -22.6 in 2021, -19.3 in 2022 and -8.3 in 2023
- General Government Gross Debt, percent GDP: 13.7 in 2021, 27.3 in 2022 and 44.1 in 2023
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Remittance tax back in play as Kuwaiti MPs submit bill
Organized By: Gulf Business
Kuwait- January 18, 2021:
The tax on expatriates’ money remittance is back in the news as Parliamentarians Osama Al-Shaheen, Hamad Al-Matar, Abdulaziz Al-Saqaabi, Shuaib Al- Al- Muwaizri and Khalid Al-Otaibi bring a new proposal on taxing remittances.
At present, the exchange companies are collecting fees for remittances, but the State gets nothing. The State will benefit from remittances through this bill, Al-Shaheen explained.
The Kuwaiti MP stated that roughly KD 21 bn has been transferred out of Kuwait in the past five years – averaging KD 4.2 bn every year. Based on these figures, some KD 100 m can be collected every year by imposing the fee. He disclosed that the draft submitted aims to enhance the public budget, support the domestic economy, generate more opportunities and avoid capital leaving the country.
This bill amends law number 32/1968 which regulates the currency, Central Bank of Kuwait (CBK) and banking procedures. The article mandates the Central Bank of Kuwait to take the necessary steps to obligate local banks, branches of foreign banks and money exchange companies to collect tax on remittances – at a rate of 2.5 percent regardless of the currency. This tax will be added to the State treasury.
Money transfers related to agreements on investment protection and money transferred by the government are tax-exempt. The Central Bank must exempt Kuwaitis studying abroad, those undergoing treatment overseas treatment, and if the transferred amount is less than KD 10,000 per year from paying such tax.