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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: 41
Year: 2013
Country: 🇰đŸ‡ŧ Kuwait
Official Name: Executive Rule No. 41 Concerning reimbursable costs

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. 41 Concerning reimbursable costs

Article No. 19 of Executive Regulations:

First: deduction of costs reimbursable from total revenues before calculating net profit will be allowed upon deemed accounting for incorporated boy as per the following provisions;

  1. The reimbursable cost must be necessary to execute the contract, and must be clearly stated in the contract.

  2. Such costs must not exceed 30% of the annual revenue.

  3. The reimbursable cost must be substantiated by proper documents in support.

Second: if reimbursable costs exceed a percentage of 30% of annual revenues, the company shall abide to file its tax declaration based on regular accounts and will be accounted as per actual (documentary) inspection in lieu of deemed profit basis accounting.

Third: approved reimbursable cost shall be deducted from total revenues upon calculating head office expenses and agent's commission.

Fourth: special and exceptional cases related to reimbursable costs will be treated separately after consulting the Tax Department in this regard.