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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: 33
Year: 2013
Country: 🇰đŸ‡ŧ Kuwait
Official Name: Executive Rule No. 33 Concerning provisions for leave

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. 33 Concerning provision for leaves

Article No. 3 of the Executive Regulations

First: Provision for leaves reported in the tax declaration and related to the year subject to inspection shall be allowed as follows:

  1. A period of 30 days annual leave with full salary is due to an employee; and shall be accounted by dividing the salary to the to the actual working days without accounting weekends although weekends are also due with full salary.

  2. No leave shall be due to the employee for the first year unless the employee spends at least 9 months at the service of the employer. Public holidays and sick leaves during the said period may not be discounted from the annual leave. The employee shall be entitled to the fractions of a year pro rata the time spent on service even if for the first year of service.

  3. Provision for leave is computed based on the employee's basic salary plus all what he usually receives such as, allowances and bonuses, commissions, grants or periodic donations. Hence, the allowances that the employee usually and periodically receives including transport and accommodation allowances shall be accounted as salary, except any allowances that may be paid to the employee as compensation for costs that have been incurred due to work.

  4. The previous limitations of paid leave may be overwritten special cases that have been stipulated in the work contracts or according to the employer's internal rules and regulations provided that such rules and regulations are submitted to Tax Department for obtaining their prior approval.

  5. These provisions shall be applicable as of the date of publication of the Law no. (6) of 2010 on Employment in the Civil Sector in the Official Gazette on 21/2/2010

Second: The special and exceptional cases related to provision for leaves shall be separately treated after consulting the Tax Department in this regard.

Example:

An employee was appointed on 1/1/2011 with a monthly salary of KD 600 plus accommodation allowance KD 200 per month and transport allowance KD 75. His salary has increased in 2012 to KD 700, and he did not take leave during 2011/2012.

The provision for leave for the employee is computed as follow:

  • The fiscal year end at 31/12/2011

    Provision for leaves = (600+ 200+ 75) × 30 days26 days = KD 1010

  • The fiscal year end at 31/12/2012

    Provision for leave = (700+200+75) × 60 days26 days = KD 2250

Leave provision charged in previous year = KD (1010)

Leave provision to be charged for 2001 = KD 1240

Note:

For allowances received by the employee and which are not included in the salary, those are allowances that are payable to the employee as compensation for the incurred expenditures due to work such as:

  1. Travel allowance that is paid for the messengers are not be included within the salary items.

  2. Telephone allowance that is paid for the marketers via telephone is not included within the salary elements.