The tax system in Kuwait
The tax system in Kuwait is definitely a bonus to living and working in the country for both nationals and expats.
Income tax
There is currently no income tax in Kuwait. Kuwait also does not have sales tax for any goods or services. Kuwaiti nationals pay social security taxes, but expats do not. There are ongoing discussions about initiation of a small remittance tax on expat salaries; however, this has not yet been decided on. A plan for up to 5% tax on expat money transfers out of Kuwait of 500 KWD or more has also been proposed but not yet decided on. Further, some GCC countries, such as the UAE, are introducing a VAT tax with Kuwait still undecided. Government services that other countries fund with tax money, in Kuwait, they fund these services with oil revenues.
Corporate tax
Foreign businesses in Kuwait pay a flat corporate income tax rate of 15%. Kuwaiti owned businesses are exempt from this tax. Kuwait is a signatory of the Arab Tax Treaty and the GCC Joint Agreement ' both of which allow for the avoidance of double taxation in most areas. Double taxation agreements are also in place with certain countries relating to international air and sea travel.
Tax services in Kuwait
There are many tax services available to help expats complete taxes for their home country if required ' all United States citizens, for example, must file taxes regardless of where they live. The assistance of a well-qualified tax advisor familiar with expatriate laws and regulations will significantly help ease the filing process.
