What is a remittance?

A remittance is a payment of money that is transferred to another party. Broadly speaking, any payment of an invoice or a bill can be called a remittance. However, the term is most often used nowadays to describe a sum of money sent by someone working abroad to his or her family back home.The term is derived from the word remit, which means to send back.

Most remittances are made by foreign workers to family members in their home countries. The most common way of making a remittance is by using an electronic payment system through a bank or a money transfer service. People who use these options are generally charged a fee. Transfers can take as little as ten minutes to reach the recipient.

Is there a personal tax in Kuwait?

There is no personal tax in the state of Kuwait. However, there is corporate tax applicable to foreign bodies corporate in Kuwait.
The current CIT rate in Kuwait is a flat rate of 15%. Foreign companies carrying on trade or business in the offshore area of the partitioned neutral zone under the control and administration of Saudi Arabia are only subject to tax in Kuwait on 50% of their taxable profit under the law.

When will VAT be introduced in Kuwait?

Kuwait, Qatar and Oman are the remaining GCC member countries which have delayed the implementation of the VAT system.

Kuwait plans to introduce VAT at 5 % in April 2021.

I am providing consultancy services to a company in Kuwait, which has no branches in UAE. Could you kindly clarify if the services are zero-rated?

Question –
I am providing consultancy services to a company in Kuwait, which has no branches in UAE. The services are provided by way of emails only. Could you kindly clarify the following:
1. Are the services zero-rated?
2. Is the place of supply Kuwait?

Answer –
As per Article 31(1)(a) of the VAT Executive Regulations, where the Services are supplied to a Recipient of Services who does not have a Place of Residence in an Implementing State and who is outside the State at the time the Services are performed, the services can be zero rated.

In the absence of agreement at the GCC level, the Implementing State condition is diluted to outside State (UAE).

The services described falls in the above criteria, hence it will be zero rated.