GTL Summary:

Ministerial Decision No. 55 of 2025 establishes Kuwait's DMTT framework under Decree-Law No. 157 of 2024. Article 20 provides an annual election for a Domestic Constituent Entity to exclude income from debt releases from its GloBE Income or Loss calculation. This exclusion is permissible under specific financial distress scenarios, including statutory insolvency or bankruptcy proceedings, or arrangements with third-party creditors to prevent imminent insolvency. If these conditions are not met, a limited exclusion may apply if liabilities exceed asset value, capped by specific criteria. The election is valid for one Tax Period only.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-20
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 20 - Debt Releases
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 3 - GLOBE INCOME OR LOSS

Article 20 - Debt Releases

Based on the election of the DCE, income resulting from debt release or forgiveness included in the FANIL of any CE located in the State shall be excluded from GloBE Income or Loss, if any of the following cases are met:

  1. The debt release arises under statutorily provided insolvency or bankruptcy proceedings, that are supervised by a court or other judicial body in the State or where an independent insolvency administrator is appointed.

  2. The debt release arises pursuant to an arrangement where one or more creditors is a Person not connected with the debtor (i.e. third-party debt), and it is reasonable to conclude that the debtor would be insolvent within (12) months but for the release of the third-party debts released under the arrangement.

  3. If neither clauses (1) nor (2) apply, and the debtor’s liabilities are in excess of the fair market value of its assets determined immediately before the debt release, then an amount will only be excluded from the CE’s GloBE Income or Loss with respect to debts owed to a creditor that is a Person that is not connected with the debtor and only to the extent of the lesser of the following clauses:

    1. The excess of the debtor’s liabilities over fair market value of assets determined immediately before the debt release.

    2. The reduction in the debtor’s attributes under the tax laws of the debtor’s jurisdiction resulting from the debt release.

This election is valid for one Tax Period only.

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