Kuwait replaces corporate tax with a 15% domestic minimum top-up tax for large multinationals

Kuwait said the law aims to diversify state revenue and stop Kuwaiti-source profits being taxed abroad under other countries' Pillar Two rules.

What changed

• Scope: multinational groups with consolidated revenue of EUR 750 million or more in two of the last four fiscal years, operating in Kuwait through entities or permanent establishments.
• Rate: a 15% minimum effective tax, from fiscal years starting on or after 1 January 2025.
• Other taxes: for in-scope groups, Kuwait's 15% corporate income tax and 1% zakat no longer apply. Sources disagree on whether the 2.5% National Labour Support Tax also stops.
• Kuwait has not adopted an income inclusion rule or undertaxed profits rule.

Later developments

Ministerial Decision No. 55 of 2025, issued on 29 June 2025, set out the executive regulations on scope, registration, returns, permanent establishments and transfer pricing documentation. Taxpayers register with the Kuwait Tax Authority within 120 days of coming into scope.

Who is affected

Kuwaiti entities and branches of large multinational groups, and their tax teams.

Sources

• EY: Kuwait implements domestic top-up tax on MNEs (29 January 2025)
• EY: Kuwait issues executive regulations for DMTT (14 July 2025)
• BDO: Kuwait, Pillar Two domestic top-up tax enacted