GTL Summary:

Ministerial Decision No. 55 of 2025 implements Kuwait's DMTT framework under Decree-Law No. 157 of 2024. Article 41 provides the mandatory formula for calculating the jurisdictional Effective Tax Rate (ETR) for a Multinational Enterprise (MNE) Group. This rate, determined for each Tax Period, is calculated by dividing the total Adjusted Covered Taxes of all Constituent Entities in Kuwait by their aggregated Net GloBE Income. This ETR calculation is a foundational step aligned with the OECD GloBE Model Rules for determining if a Top-up Tax liability exists.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-41
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 41 - Determination of the Effective Tax Rate ( ETR )
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 5 - EFFECTIVE TAX RATE AND TAX (TOP-UP TAX)

Article 41 - Determination of the Effective Tax Rate (ETR)

The ETR of the MNE Group in the State with Net GloBE Income shall be calculated for each Tax Period. The ETR for the MNE Group in the State shall be calculated using the following formula:

ETR = Total Adjusted Covered Taxes for All CEs in the StateNet GloBE Income of all CEs in the State

The ETR result for the MNE Group in the State shall be expressed as a percentage rounded to four decimal places. Each Stateless CE shall be treated as a separate CE located in a separate Jurisdiction.

The Net GloBE Income in the State for the Tax Period shall be a positive amount, if any, and is calculated according to the following formula:

Net GloBE Income = GloBE Income for all CEs – GloBE Losses for all CEs

GloBE Income of all CEs means the aggregate GloBE Income of all CEs located within the State for the Tax Period, as determined in accordance with Chapter 3 of these ERs.

GloBE Losses of all CEs means the aggregate GloBE Losses of all CEs located within the State for the Tax Period, also determined in accordance with Chapter 3 of these ERs.

The ETR for Investment Entities and Insurance Investment Entities as mentioned in Article 56 of these ERs, Minority-Owned Constituent Entities as mentioned in Article 49 of these ERs, Minority-Owned Subgroups as mentioned in Article 49 of these ERs, and Joint Ventures and JV Subsidiaries as mentioned in Article 53 of these ERs, shall be calculated separately for each Tax Period, in accordance with the first paragraph of this Article.

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