GTL Summary:

This Rule defines and outlines the tax treatment of foreign management fees paid to an Incorporated Body for management activities under contract. It specifies that for an Incorporated Body participating in a Kuwaiti company, such fees are accepted as costs for the local company but added to the net profit of the foreign body. When an Incorporated Body completely manages a Kuwaiti company, the fees are considered earned revenues. The Rule further clarifies that under deemed profit inspection, these fees are treated as net full profit. Exceptional cases require separate consultation with the Tax Department.

Document Type: ER - Executive Rules & Instructions
Law: KIT (Law No. 2 of 2008 amending Decree No. 3 of 1955)
Decision Number: 45
Year: 2013
Country: 🇰🇼 Kuwait
Official Name: Executive Rule No. 45 Concerning foreign management fees
Last updated at: 2025-12-19 09:23:03 UTC

Executive Rule No. 45 Concerning the Foreign Management Fees

Article No. 3 of the Executive Regulations

First: Foreign management fees are the amounts paid to each Incorporated Body that exercises management activities in return of fees under contract stipulations.

Second: As for Incorporated Body participating in a Kuwaiti company, these fees shall be accepted as costs for the company as a whole and at the same time shall be added to the full net profit of the Incorporated Body.

Third: For the fees acquired by the Incorporated Body in return for complete management of a Kuwaiti company, the Incorporated Body shall be charged for these fees as earned revenues.

Fourth: In case of deemed profit inspection, these fees shall be treated as net full profit since such fees are considered as revenues without expenses in return.

Fifth: Special and exceptional cases relating to foreign management fees shall be separately treated after consulting the Tax Department in this regard.

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