Under Kuwait's Law on the Tax on Multinational Enterprise Groups, a taxpayer must keep the books, records, documents, and information required by the nature of its activity for ten years from the end of the tax period to which they relate.
The Record-Keeping Obligation
The law provides that the taxpayer must keep the books, records, documents, and information required by the nature of its activity and necessary for preparing the financial statements and determining taxable income, for ten years from the end of the related tax period. This obligation applies to every entity treated as a taxpayer under the law, whether an ultimate parent entity or a constituent entity within a multinational enterprise group, even where no tax is actually due for that period.
What Records Must Be Kept?
The executive bylaw sets out examples of the records required to determine taxable income and meet the requirements of Pillar Two, including:
- The balance sheet and the profit and loss accounts.
- The cash flow statement and the statement of equity.
- The general journal and the inventory register.
- Fixed asset registers, payroll records, a liabilities register, and a stock register.
- Transfer pricing documentation, and the documents supporting the entries in the books, records, and tax returns, such as invoices, contracts, licenses, and correspondence.
Consequence of Failing to Keep Records
If the obligation to keep books and records for the prescribed period is not met, the tax administration is entitled to make an estimated tax assessment of the taxpayer based on any information available to it, without prejudice to the imposition of the fines and penalties provided for in the law. An administrative fine of three thousand Kuwaiti Dinars is also imposed on anyone who fails to keep the accounting records and books for the prescribed period, alongside other cases such as failing to register on time or failing to submit documents requested by the tax administration within thirty days of the request.
Why This Period Matters
Taxpayers' returns are examined according to the rules and instructions issued by the tax administration, and examination may be carried out on a sample basis, and the taxpayer must enable the tax administration's staff to perform their duties regarding access, examination, verification, and control. The record-keeping period aligns with the limitation period for the tax debt itself, since the tax administration's right to claim the tax debt lapses after ten years from the date the tax return is filed, which makes keeping records available throughout this period necessary to prove the accuracy of the return in an examination or dispute.
Legal References
- Decree-Law No. 157 of 2024 issuing the Law on the Tax on Multinational Enterprise Groups – Articles 23, 24, 34, and 38 (record-keeping, examination, and limitation).
- Ministerial Resolution No. 55 of 2025 issuing the Executive Bylaw of the Law on the Tax on Multinational Enterprise Groups – Article (94).
For questions about your specific situation, you can ask the Kuwait Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.
