Income Tax Brackets in Kuwait for 2024-2025

Kuwait’s significant and booming oil sector, like many other Middle Eastern countries, brings many positive benefits, one of which is that no personal income tax is imposed on individuals. Foreign corporations are welcomed in the country although foreign ownership is restricted to a maximum of 49%. Foreign corporations are required to pay taxes. 

The taxation system in Kuwait is administered by the official tax body, the Ministry of Finance (MOF). The Ministry of Finance’s Tax Payment Service provides support services and identifies the required documents for the filing of taxes. Foreign companies are also supported through tax return services specifically for foreign companies.

The Income Tax Decree provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these income tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Kuwaiti tax laws. 

Here you will learn about:

• headline tax rates
• personal income tax (PIT) rates 
• corporate income tax (CIT) rates 
• capital gains tax (CGT) rates 
• withholding tax rates
• sales tax and value-added tax (VAT) rates 

Headline Tax Rates in Kuwait

Personal Income Tax (PIT) in Kuwait 

Kuwait does not impose personal income tax (PIT) on individuals.

Corporate Income Tax (CIT) Rates in Kuwait 2024-2025

Every foreign body corporate must register and apply for a tax card within 30 days of starting any activity or signing any business contract. The current corporate income tax (CIT) rate only applies to foreign corporations. No CIT is imposed on companies that are wholly owned by nationals of Kuwait or any of the other Gulf Cooperation Council (GCC) countries. The GCC countries are Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates. 

All income earned from activities within Kuwait are subject to tax on the basis that it is Kuwait-sourced income.

Compliance obligations for a foreign company are generally determined by the nature of the income. A company may complete a tax registration, file a tax declaration and settle its taxes or choose to approach the Kuwait Tax Authority for a letter determining if income is taxable.

Corporate Income Tax Due Dates

Capital Gains Tax in Kuwait

There is no separate capital gains tax (CGT) regime in Kuwait. Capital gains on the sale of assets and shares by foreign corporate bodies and shareholders are treated as normal corporate income and are subject to the 15% corporate tax rate.

Withholding Tax Rates in Kuwait

In general, Kuwait does not impose withholding tax (WHT). However, public bodies and private organizations are required to retain 5% of the transactional value of every payment made until they receive a tax clearance certificate.

As Kuwait has entered into tax treaties with several countries, tax rates may differ and a taxpayer may benefit from the provisions of these tax treaties.

Sales Tax and Value-Added Tax (VAT) in Kuwait

Despite signing the Unified VAT Agreement for The Cooperation Council for the Arab States of the Gulf (GCC) which aims to impose a uniform VAT rate of 5% in the GCC States, Kuwait does not currently impose a sales tax or Value-Added Tax (VAT).