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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: 42
Year: 2013
Country: 🇰đŸ‡ŧ Kuwait
Official Name: Executive Rule No. 42 Concerning the bases of discarding accounts

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. 42 Concerning the bases of discarding accounts

Article No. 19 of the Executive Regulations:

First: The accounts of the Incorporated Body shall be discarded if it clearly violates the income tax Decree and its amendments, particularly in the following cases:

  1. Violation of Article 15 of the Executive Regulations which stipulates the filing of books on account basis in accordance with the laws of the State of Kuwait and those such books shall be organized in a formal and objective manner (approved by the Ministry of Justice and recorded item by item).

  2. Non availability of the documents in support of the accounts, or a large gap in them, or the inconsistency of the documents with the records.

  3. Not declaring taxable revenues in the tax declaration, which have a materialistic impact on the business results.

  4. Substantial qualification of the auditor on the accounts of the Incorporated Body.

  5. Substantial weakness of the internal control system.

  6. The tax declaration does not include the required attachments, in accordance with Article 13 of the bylaws.

  7. Non compliance of the Incorporated Body to provide the necessary books and records for inspection after determining two appointments via official letters.

Second: The deemed profit percentage shall be determined on the following bases:

  1. Similar cases.

  2. Size of the Incorporated Body's revenues.

  3. Type of activity.

  4. Cases of recession or boom in the economy.

  5. The year of accounting and profitability in the previous years.

Third: Other revenues for which there are no expenses are added to the estimated net profit before tax computation.

Fourth: Special and exceptional cases relating to the bases of discarding accounts shall be treated separately after consulting the Tax Department in this regard.