Kuwait's tax landscape's recent Developments

During a joint webinar by the Kuwait Tax Authority (KTA) and Kuwait Direct Investment Promotion Authority (KDIPA), updates were shared regarding revised procedures for the release of tax retentions, specifically targeting entities licensed by KDIPA.

In the new process, entities holding KDIPA licenses and approved corporate tax incentives can now acquire a No Objection Letter from KTA to release a portion of tax retentions from their contract owners before completing the tax inspection process and receiving the annual tax assessment. However, this release is capped at 80% (i.e., 4% of the total 5% retention) of the reported retained amount in the tax declaration for that year. The remaining 20% is slated for release upon KTA's issuance of the tax assessment for the respective year, following the usual process.

This partnership between KDIPA and KTA marks a positive collaboration, facilitating the release of tied-up funds in the form of tax retentions for eligible taxpayers, a move welcomed by all parties involved.