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Document Type: ER - Executive Rules & Instructions
Law: KIT (Law No. 2 of 2008 amending Decree No. 3 of 1955)
Decision Number: 32
Year: 2013
Country: 🇰đŸ‡ŧ Kuwait
Official Name: Executive Rule No. 32 Concerning salaries, wages and equivalent expense

Ministry of Finance - Tax Department - 2013 [Executive Rules & Instructions]

Executive Rules and Instructions of Kuwait Income Tax Decree No. 3 of 1955 as amended by law No. 2 of 2008

Executive Rule No. 32 Concerning salaries, wages expenses and the equivalent cases thereof

Article No. 3 of the Executive Regulations:

First: salaries are:

What the employee receives as basic salary plus allowances, bonuses, commission, grants or periodical donations that the employee usually receives in accordance with labor law in the private sector (Article 28).

  1. Salaries locally paid:

    These are the amounts that are paid to the individuals in return of carrying out business in the State of Kuwait; this item shall be accepted after reviewing all supporting documents.

  2. Salaries paid by the head office:

    These are the amounts paid to individuals who perform work directly related to business of the State of Kuwait whether inside or outside the State of Kuwait. These amounts are allowed after ensuring the Incorporated Body's need for such expenditures provided that they do not include the expenditures related to purchases, design or administrative expenditures as well as the expenditures related to researches and technical studies on condition of providing the supporting documents.

Second: Social Security paid abroad:

The expenditure of Social Security shall be allowed in case the following conditions are fulfilled:

  1. Connected with laborers working in the State of Kuwait.

  2. Not to exceed 10% of basic salary for those laborers.

  3. No provision for the end of service's benefits shall be accounted for those laborers.

Third: Rewarding outstanding Works:

Expenses for outstanding works shall be allowed in case the following conditions are fulfilled:

  1. The Incorporated Body has recognized profits in that year in accordance with its Tax Declaration.

  2. The reward must be stipulated in the Incorporated Body's Articles of Association or the employees' contracts.

  3. To be paid in Kuwait.

  4. Not exceed the salary of 3 months.

Fourth: Special and exceptional cases relating to Expenses of salaries, wages and the similar cases thereof shall be separately treated after consulting the Tax Department in this regard.