Kuwait Ministry of Finance Amends Tax Inspection Process

The Kuwait Ministry of Finance (“MOF”) issued Ministerial Resolution No. 24 of 2023 (“the Resolution”) dated 27 March 2023 to introduce rules for carrying out tax inspections (tax audits) on a sample basis. Currently, every tax declaration filed by a taxpayer is subject to a detailed tax inspection by the MOF. The Resolution essentially aims at speeding up the process of issuance of tax assessments and to reduce the backlog of un-assessed tax years.



The Resolution applies to taxpayers subject to the following tax laws of Kuwait:

  • Income Tax Decree No. 3 of 1955 as amended.
  • Income Tax Law for Divided Zone No. 23 of 1961.
  • National Labour Support Tax Law No. 19 of 2000.
  • Zakat Law No. 46 of 2006. Methodology

The Resolution lists four different methods of inspections that can be followed by the Department of Inspection and Tax Claims (“DIT”) to conclude an inspection and issue a tax assessment. These are as follows:

  • Detailed tax inspection.
  • Targeted tax inspection (aimed at specific expense/revenue items)
  • Deemed profit tax inspection.
  • Acceptance of declarations (no inspection)

The DIT will issue rules / clarifications for the implementation of the inspection methods. It is our understanding that the inspection methods will be determined based on a risk assessment of a tax declaration/ taxpayer. Annual turnover as well as losses reported in the tax declaration are likely to be key factors for subjecting a taxpayer to a detailed tax inspection.


Effective date of the Resolution

The Resolution is effective from 2 April 2023, the date it was published in the official gazette in Kuwait.


BDO comments

The Resolution will hopefully bring much needed uniformity in carrying out tax inspections on a systematic and timely basis. One of the biggest issues at present is the time lag between the filing of a tax declaration and the completion of tax assessment process. This often resulted in a delay in obtaining tax retention release letters.

We expect the DIT to issue further instructions in the coming weeks including the procedures and criteria for implementing the tax inspection methods. Please contact us if you would like to discuss the above further.