Multinational Entities Tax

As part of the State of Kuwait’s commitment to international tax standards, enhancing transparency, and combating tax evasion, Decree-Law No. 157 of 2024 regarding the taxation of multinational entities in the State of Kuwait was issued on 10 July 2024. The law entered into force through Executive Regulation No. 55 of 2025 on 29 June 2025.

This tax aims to ensure that multinational entities pay their fair share of taxes, in line with international agreements on the Global Minimum Tax and the standards set by the Organization for Economic Co-operation and Development (OECD) under the Base Erosion and Profit Shifting (BEPS) project.

What are the key features of the law and executive regulation?

• Application of a minimum effective tax on the profits of multinational entities.
• Imposition of new accounting, tax, and disclosure obligations on companies subject to the law.
• Strengthening coordination with international agreements for tax information exchange.
• Application of transfer pricing rules to transactions between related companies.
• Mandating eligible entities to submit Country-by-Country Reporting (CbCR) and supporting tax forms.

What is meant by Multinational Entities (MNEs)?

They are groups of companies that operate in more than one country and have consolidated revenues exceeding EUR 750,000,000. These groups often include holding companies, branches, and subsidiaries in various countries. Such entities are subject to Transfer Pricing rules and both local and global disclosures under the new system.

What is the tax on a group of multinational entities, and what are the eligibility criteria?

The Domestic Minimum Top-Up Tax (DMTT) is aligned with the OECD’s Pillar Two guidelines.

The DMTT will be imposed on multinational entities (MNEs) with global annual revenues exceeding EUR 750 million in at least two of the last four years, subject to certain exemptions based on OECD guidance and rules.

When will the Domestic Minimum Top-Up Tax (DMTT) for Multinational Entities (MNEs) be implemented in Kuwait?

The Domestic Minimum Top-Up Tax (DMTT) for Multinational Entities (MNEs) will be implemented in Kuwait for financial years beginning on or after 01 January 2025.

What will happen to the currently applicable taxes on multinational entities in the State of Kuwait?

The Domestic Minimum Top-Up Tax Law will replace all currently applicable taxes on multinational entity groups. Other business entities will remain subject to the existing tax regime.

What are the services provided by Baker Tilly Kuwait?

Baker Tilly is a specialized tax consulting and audit firm in the State of Kuwait, offering full support to multinational entities through a comprehensive suite of services designed to ensure full compliance and effective tax planning:

Our services include:

1. Evaluating whether an entity is subject to the Multinational Entities Tax requirements in the State of Kuwait.
2. Analyzing the group structure and identifying the liable companies and consolidated revenues.
3. Preparing tax policies and transfer pricing documentation in line with Kuwaiti law and international standards.
4. Preparing and submitting Country-by-Country Reports (CbCR) and related tax return forms.
5. Reviewing and documenting related-party transactions and advising on minimizing the risk of tax adjustments.

Why Baker Tilly Kuwait?

1. Expertise and Professional Specialization

   Proven experience in dealing with national regulations and laws, including the Global Minimum Tax and Transfer Pricing in Kuwait.

2. Professional Reputation and Credibility

   A strong track record of serving clients across various sectors, reinforced by our membership in the Baker Tilly International network.

3. Tailored, Value-Driven Solutions

   A deep understanding of clients’ business nature and the ability to provide practical, analytically sound tax solutions.

4. Commitment to Compliance and Accuracy

   Robust methodologies and internal review processes that reduce potential tax risks and ensure full regulatory compliance.

5. Capability to Manage Complex Challenges

   In-depth expertise in transfer pricing, cross-border structuring, advising on international tax treaties, and supporting dispute resolution with tax authorities.

6. Effective Communication and Responsiveness

   Direct communication channels with tax consultants and continuous support, whether for urgent matters or routine follow-ups.

7. Leveraging Technology and Digitalization

   Use of advanced tools and technologies to enhance the efficiency of filings and tax data analysis, and advisory on tax digitalization and automation.

8. Value for Money

   Delivering true value beyond the cost by minimizing risks, increasing compliance, and achieving lawful tax savings.