Talking Tax

On 24 December 2024, the Council of Ministers approved the draft legislation for DMTT (Domestic Minimum Top-up Tax) as a measure to help fulfill Kuwait’s commitments to bring about tax reforms and better alignment with global tax standards, which were made under the Inclusive Framework on BEPS (Base Erosion and Profit Shifting). Kuwait had signed the OECD/G20 Inclusive Framework on BEPS on 15 November 2023, joining 140 members countries and jurisdictions, to support global efforts towards tax transparency.

With the implementation effective 1 January 2025, every MNE (multinational enterprise) with a consolidated revenue above EUR750 Million in Kuwait is now subject to pay a minimum 15% tax. As a result of this shift, MNE tax teams are expected to be in the thick of challenges emerging from Pillar 2 legislation, such as requirement of new forms of financial data that they may not currently have access to within their organizations to be compliant with the new rules, lack of understanding of local tax legislation of the jurisdictions they might be operating in, and the need to be updated with the changing laws and regulations, among others.