GTL Summary:

Article 18 of Decree-Law No. 157 of 2024 mandates that transactions between related entities must adhere to the arm's length standard for determining net income. This standard is met when the financial and commercial conditions of such transactions are comparable to those between independent entities in similar circumstances. If this principle is not observed, the Kuwait Tax Department is authorised to recalculate the net income based on the appropriate arm's length price. Forthcoming executive regulations will provide specific controls for identifying related entities and detail the approved methods for calculating the arm's length price.

Document Type: Tax Law Article
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Article Number: tl-18
Country: 🇰🇼 Kuwait
Location: Chapter 3 - Tax Imposition and Entitlement
Order: 24
Last updated at: 2025-12-19 09:23:03 UTC

Chapter 3 - Tax Imposition and Entitlement ^[G1]

Article 18 - Transactions Among Related Entities

Related entities must comply with the arm's length standard when determining net income. The net income is considered to meet this standard when the financial or commercial transactions, on which it is based, were carried out under conditions that are similar to those that would apply between unrelated entities in comparable circumstances.

If this is not complied with, the Tax Department shall have the right to determine the net income based on the arm's length price.

The executive regulations will define controls related to identifying related entities, and the methods and rules for calculating the arm's length price.

Fast-loading version for search engines - Click here for the interactive version