A tax at the rate of 2.5% of annual net profit is imposed on Kuwaiti companies listed on the Kuwait Stock Exchange, under Law No. 19 of 2000 on National Labor Support and Encouraging Kuwaitis to Work in Non-Governmental Bodies.

Purpose of the Tax and Who Is Subject to It

The law provides that, to secure the resources necessary for implementing its provisions, a tax at the rate of 2.5% of annual net profit is imposed on Kuwaiti companies listed on the Kuwait Stock Exchange. These resources are directed toward developing the national workforce and encouraging its employment in non-governmental bodies, alongside paying the social allowance, the children's allowance, and the cash allowance for unemployed citizens.

Registration and the Tax Card

Companies subject to the law must apply for a tax card within thirty (30) days of the date of listing on the Kuwait Stock Exchange, and the card is issued within a week of the date of the request and completion of the required documents, and it is renewed annually no later than the fifteenth day of the fourth month following the end of the tax period. The company must present its tax card to all entities as a basic condition for dealing with it.

Penalties for Violating the Law

Any person who submits incorrect information for the purpose of illegitimately obtaining benefits provided by this law is subject to imprisonment not exceeding one year and a fine not exceeding one thousand Dinars, or either penalty, and the court shall order the return of amounts paid without legitimate cause. A person who submits incorrect information for the purpose of evading payment of this tax is subject to imprisonment not exceeding three years and a fine not exceeding five thousand Dinars, or either penalty.

How the Tax Proceeds Are Used

The law directs the proceeds of this tax and other resources toward a set of measures supporting the national workforce, including that the government pays citizens who are craftsmen and vocational workers, and those working in all bodies, a social allowance and a children's allowance, and that every unemployed Kuwaiti citizen is given a financial allowance whose rules and amount are set by a decision of the Civil Service Council. The government also contributes to developing the national workforce employed in non-governmental bodies by covering a percentage of its training cost.

Legal References

For questions about your specific situation, you can ask the Kuwait Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.