Kuwait imposes a domestic minimum top-up tax on multinational enterprise groups whose annual revenue equals or exceeds EUR 750 million, under Decree-Law No. 157 of 2024 issuing the Law on the Tax on Multinational Enterprise Groups, to ensure an effective tax rate of at least 15% on these groups' income in Kuwait.
Who Is Subject to This Tax?
Every entity in Kuwait that is a member of a multinational enterprise group, whether an ultimate parent entity or a constituent entity, is subject to the tax once the group's total annual revenue reaches the revenue threshold, defined as the annual revenue of the multinational enterprise group equalling or exceeding EUR 750 million in the consolidated financial statements of the ultimate parent entity for at least two tax periods within the four tax periods immediately preceding the tax period. Certain joint ventures and their subsidiaries, as well as stateless entities carrying on an activity in Kuwait, are also subject to the tax.
Excluded Entities
The law excludes from the tax government entities, non-profit organizations, international organizations, pension funds, investment funds and real estate investment vehicles that are an ultimate parent entity, and certain entities owned by these bodies at specified percentages.
How the Top-Up Tax Is Calculated
The taxpayer is taxed at a rate equal to the difference between the minimum tax, an effective tax rate of 15%, and the group's effective tax rate if it is less than 15%. The effective tax rate is calculated as the sum of the adjusted covered taxes of the taxable entities within the group divided by the sum of their net income or loss. The tax is zero if the effective tax rate equals or exceeds 15%, or if the substance-based income exclusion equals or exceeds the total net income of the group's taxable entities.
De Minimis Revenue and Income Exclusion
The tax due is zero for any tax period if the average total revenue of the group's taxable entities is less than EUR 10 million and the average total net income of those entities is less than EUR 1 million, calculated over the tax period and the two preceding periods. This exclusion protects smaller-scale groups from the detailed compliance burden of the top-up tax rules as long as their revenue and income remain below these two thresholds.
Legal References
- Decree-Law No. 157 of 2024 issuing the Law on the Tax on Multinational Enterprise Groups – Articles 1, 3, 4, 6, 7, 12, and 13 (definitions, scope, and calculation).
- Ministerial Resolution No. 55 of 2025 issuing the Executive Bylaw of the Law on the Tax on Multinational Enterprise Groups.
For questions about your specific situation, you can ask the Kuwait Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.