KUWAIT TAX RETENTION
09 February 2023
The Kuwait Tax Retention Rules is a set of tax obligations introduced to aid in the collection of taxes
in Kuwait and is applicable on foreign as well as local companies. Although introduced many years ago, many
corporate bodies in Kuwait are either unaware of the applicability of the Kuwait Tax Retention Rule or do not fully comply with the Kuwait Tax Retention Rule requirements.
In principle, Article no. 37 of the Executive Bylaw casts an obligation on all public and private entities (hereinafter referred to as “Payer”), doing trade or business in Kuwait, to retain 5%
of total contract value or from each payments made to any person with whom they enter into contracts, agreements or transactions. The scope of Kuwait Tax Retention Rule is wide and covers under its ambit any payment made by a Payer. Foreign as well as Kuwaiti and other GCC companies are required to adhere to Kuwait Tax Retention Rules.