Kuwait

Overview

Last reviewed - 07 July 2020

Kuwait is a sovereign Arab state situated in the northeast of the Arabian Peninsula in Western Asia. It is bordered by Iraq to the north and west, Saudi Arabia to the south, and the Persian Gulf to the east. Kuwait is divided into six governorates, with Kuwait City as the capital. The official language of Kuwait is Arabic, and the currency is the Kuwaiti dinar (KWD).

Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels, which is more than 6% of the world’s crude oil reserves. Kuwaiti officials plan to increase oil production to 4 million barrels per day by 2020. Petroleum accounts for over half of gross domestic product (GDP), 94% of export revenues, and 90% of government income.

In 2015, for the first time in 15 years, Kuwait reported a budget deficit after decades of high oil prices. Kuwaiti authorities have tried to reduce the deficit by decreasing spending on subsidies for the local population, but with limited success. Despite Kuwait’s dependence on oil, the government has cushioned itself against the impact of lower oil prices by annually saving at least 10% of government revenue in the Fund for Future Generations.

With the Kuwaiti dinar pegged to a basket of currencies dominated by the United States dollar (USD), the Central Bank of Kuwait raised the discount rate by 25 basis points to 3%, effective from March 2018, in order to maintain the competitiveness of the Kuwaiti dinar. Private sector credit is growing at a moderate pace, mitigating concerns about financial risks. The banking sector is well capitalised, yet has exposure to the real estate sector.

Fiscal reforms remain limited. With current spending amounting to 90% of total spending, cutting expenditures has proved challenging. Electricity and fuel subsidy cuts have been proposed, but face strong opposition in the Parliament. In mid-March 2016, the Cabinet approved a reform package focused on public sector and expenditure reforms, public private partnership (PPP) and privatisation, small and medium enterprise (SME) development, and labour market and investment climate reforms, but these still need to be approved by the Parliament. In January 2017, the Kuwaiti government unveiled the country’s new National Development Plan up to the year 2035, under the name ‘New Kuwait’. Among the targets of the plan is reforming governmental administrative and bureaucratic practices to facilitate and accelerate obtaining business licences, reducing the dependency on oil export revenues by allowing the establishment of new small businesses, and improving infrastructure, where around ten infrastructure development projects are already underway as of March 2018, among others.

Also, fiscal and current account positions should gradually strengthen in line with a modest recovery in oil prices and output. Public finances should also be supported by the gradual implementation of spending and revenue reforms, including the implementation of a value-added tax (VAT) in the near future.

PwC has been established in the Middle East for 40 years. PwC has firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar, Saudi Arabia, and the United Arab Emirates, with around 4,000 people. PwC Kuwait's tax professionals have worked with all types of businesses, including governments, banks, investment houses, multinationals, family businesses, and individuals. We have extensive experience in international and regional tax structuring and also in advising on international mergers and acquisitions (M&A) transaction issues and private equity fund structures.

PwC Kuwait is renowned for the depth and quality of its expertise. Our focus is on providing clients with value-adding assistance through understanding their individual needs and assisting them in implementing the most efficient tax strategies.

Quick rates and dates

Corporate income tax (CIT) rates
Headline CIT rate (%)

A flat rate of 15%

Corporate income tax (CIT) due dates
CIT return due date

Before or on the 15th day of the fourth month following the end of the taxable period (see Kuwait's Corporate summary for a description of available extensions).

CIT final payment due date

Tax due per the tax declaration may be settled in full along with the tax declaration or in four equal instalments. Any additional tax liability imposed through the tax assessment is required to be settled within 30 days from the date of the tax assessment letter.

CIT estimated payment due dates

The Kuwait Tax Law does not provide for estimated tax payments.

Personal income tax (PIT) rates
Headline PIT rate (%)

NA

Personal income tax (PIT) due dates
PIT return due date

NA

PIT final payment due date

NA

PIT estimated payment due dates

NA

Value-added tax (VAT) rates
Standard VAT rate (%)

NA

Withholding tax (WHT) rates
WHT rates (%) (Div/Int/Roy)

NA

Capital gains tax (CGT) rates
Corporate capital gains tax rate (%)

Capital gains are subject to the normal CIT rate.

Individual capital gains tax rate (%)

NA

Net wealth/worth tax rates
Headline net wealth/worth tax rate (%)

NA

Inheritance and gift tax rates
Inheritance tax rate (%)

NA

Gift tax rate (%)

NA

NA stands for Not Applicable (i.e. the territory does not have the indicated tax or requirement)

NP stands for Not Provided (i.e. the information is not currently provided in this chart)

All information in this chart is up to date as of the 'Last reviewed' date on the corresponding territory Overview page. This chart has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this chart, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.