Kuwait's Law on the Tax on Multinational Enterprise Groups imposes a graduated penalty for late filing of the tax return ranging from 5% to 25% of the final tax, in addition to a late-payment penalty, other administrative fines, and criminal penalties for tax evasion.
Late Filing Penalty
The law provides for the following graduated late-filing penalty:
- 5% of the final tax if the filing delay is 30 days or less.
- 10% of the final tax if the delay is more than 30 days and up to 90 days.
- 15% of the final tax if the delay is more than 90 days and up to 365 days.
- 20% of the final tax if the delay is more than 365 days and before the date the tax assessment is issued.
- 25% of the final tax, with a minimum of five thousand Kuwaiti Dinars, if the taxpayer has not filed the return by the date the tax assessment is issued.
Late Payment Penalty and Inaccurate Return Penalty
A penalty of 1% of the unpaid amounts is imposed on the taxpayer for every thirty days or part thereof, if the tax due is not paid within the legal deadline for filing the return. If a taxpayer files an inaccurate tax return and the difference between the final tax and the tax shown in the return exceeds 10% of the tax value in the return, a penalty of 25% of this difference is imposed, reduced to 10% if the taxpayer corrects the error before it is discovered by the tax administration.
Other Administrative Fines
A fine of three thousand Kuwaiti Dinars is imposed on anyone who fails to register on time, fails to notify the tax administration of changes to registration or activity data, fails to submit requested documents within thirty days of the request, obstructs tax administration staff from performing their duties, or fails to keep records and books for the prescribed period. A fine of five thousand Kuwaiti Dinars is also imposed on anyone who discloses information relating to taxpayers other than in cases permitted by law.
Tax Evasion Penalty
Anyone who commits or participates in forging, fabricating, concealing, or destroying books, records, documents, or data affecting the amount of tax due is punishable by imprisonment not exceeding three years and a fine not exceeding three times the evaded tax, or either penalty. In the event of a repeat offence within five years of the penalty being carried out, the penalty becomes imprisonment not exceeding five years and a fine not exceeding five times the evaded tax.
Legal References
- Decree-Law No. 157 of 2024 issuing the Law on the Tax on Multinational Enterprise Groups – Articles 31, 32, 33, 34, 35, and 36 (fines and penalties).
For questions about your specific situation, you can ask the Kuwait Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.