First: Bank interest

1. The interest locally paid on bank facilities and loans used in the main activity of the Incorporated Body shall be accepted after ensuring the necessity of the loan and also the supporting documents. As for the interest on the loans utilized in financing the capital operations, these interests shall be capitalized and added to the asset value.

2. All interests charged by the head office for its current account in the incorporated body's branch in the State of Kuwait shall be discarded. The same applies to the interests charged by the agent.

3. The interests paid abroad shall be discarded unless it is proved that such interests have been paid for loans and bank facilities to finance the Incorporated Body's activities in the State of Kuwait.

Second: Letter of Guarantee's commission paid abroad

This commission shall be allowed after ensuring that such commission is only paid to a foreign bank to issue letter of guarantee from a local bank provided that the letter of guarantee is related to a taxable project in Kuwait. Commissions related to letter of guarantee where the revenue is not taxable shall not be allowed.

Third: Insurance paid abroad

Compulsory insurance shall be allowed in accordance with the local laws, and it includes insurance on workers, materials, and equipments if the insurance is local. Insurance on contracts abroad is not allowed excluding insurance on imported materials. These shall be treated as cost of the materials.

Fourth: Special and exceptional cases relating to bank interests shall be separately treated after consulting the Tax Department in this regard.