Kuwait's New Minimum Top-Up Tax Regime

In this episode, we spotlight Kuwait’s latest move to reshape its tax landscape — the introduction of a Domestic Minimum Top-Up Tax, or DMTT, effective January 1, 2025. 

This regime brings Kuwait in line with the OECD’s Pillar Two Global Anti-Base Erosion (GloBE) Rules, part of a worldwide effort to ensure that large multinational enterprises — those with global revenues exceeding EUR 750 million — pay at least a 15% effective tax rate on profits earned in each jurisdiction, including Kuwait. 

So why is Kuwait doing this?

✅ To secure its own taxing rights,

✅ Protect critical tax revenues,

✅ And show it’s fully aligned with evolving global standards. 

This new framework doesn’t just affect foreign companies; it equally impacts Kuwaiti-headquartered MNEs with operations across borders. 

Here’s how it works: 

• If a multinational’s Effective Tax Rate (ETR) on profits earned in Kuwait falls below 15%, Kuwait will now levy a top-up tax to bridge the gap.
• The law also sets out clear compliance requirements, such as registration deadlines, annual tax return submissions, and a 10-year record retention rule.  

For companies meeting specific conditions, there’s a safe harbor window offering transitional relief to ease into this new normal. 

The bottom line?

MNEs operating in Kuwait need to rethink their group structures, shore up data systems, and closely track both local and global tax developments. 

This is more than a compliance shift; it’s a clear signal that the global tax playing field is changing — and Kuwait is making sure it’s not left behind. 

🎧 Stay tuned as we continue to break down what these evolving tax regimes mean for your business strategy and bottom line.

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