Kuwait has joined the global move toward a minimum level of corporate taxation. Decree-Law No. 157 of 2024 introduced a Domestic Minimum Top-up Tax (DMTT) that ensures large multinational groups pay an effective tax rate of at least 15% on their profits in Kuwait. The rules apply to fiscal years beginning on or after 1 January 2025.
Who is in scope?
The DMTT applies to members of multinational enterprise (MNE) groups whose ultimate parent entity reports consolidated annual revenue of EUR 750 million or more in at least two of the four preceding fiscal years. Permanent establishments in Kuwait of foreign group entities can also fall within scope. Smaller, purely local businesses are not affected by this tax.
How does it work?
The law follows the OECD Pillar Two (GloBE) model. Where the effective tax rate of a group’s Kuwaiti entities is below 15%, a top-up tax is charged to bring it up to the minimum. Kuwait collects the full top-up amount for its jurisdiction, regardless of the ownership percentages held in the Kuwaiti entities.
The Executive Regulations
The Ministry of Finance issued the Executive Regulations through Ministerial Resolution No. 55 of 2025 on 29 June 2025. They set out the detailed rules on scope, registration, return filing, permanent establishments, the calculation of taxable income and covered taxes, transfer pricing documentation and available safe harbours.
In 2026, Ministerial Circular No. 1 of 2026 introduced an optional advance tax payment mechanism, based on a provisional DMTT return, for tax periods ending on or before 31 March 2026.
What should businesses do now?
- Confirm whether your group meets the EUR 750 million revenue threshold.
- Complete DMTT registration within the deadlines set by the Ministry of Finance.
- Model your Kuwait effective tax rate and potential top-up tax exposure.
- Review data systems and transfer pricing documentation so returns can be supported.
- Assess whether any safe harbour could reduce the compliance burden.
Our team can help you assess your position, prepare the required calculations and stay compliant as further guidance is issued.
This article is for general information only and does not constitute tax or legal advice. For advice on your specific situation, please contact our team.
