GTL Summary:

Ministerial Decision No. 55 of 2025 provides the executive framework for Kuwait's Domestic Minimum Top-up Tax (DMTT) regime under Decree-Law No. 157 of 2024. Article 42 establishes the core formula for calculating the Top-up Tax rate applicable to a Multinational Enterprise (MNE) Group. It mandates that for each tax period, the applicable rate is determined by subtracting the MNE Group's jurisdictional Effective Tax Rate (ETR) from the statutory 15% minimum tax rate, a critical step aligned with the OECD's Pillar Two GloBE model.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-42
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 42 - Tax Rate and Tax Calculations
Last updated at: 2026-02-23 12:13:40 UTC

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

Article 42 - Tax Rate and Tax Calculations

The calculation for the Tax rate for the MNE Group, located in the State shall be computed per Tax Period according to the following formula below:

Tax Rate = Minimum Tax Rate of 15% - ETR

The ETR is determined in the State for each Tax Period in accordance with Article 41 of these ERs.

The Taxable Income (i.e., Excess Profit) in the State for the Tax Period shall be the positive amount, if any, calculated according to the following formula:

Taxable Income (i.e., Excess Profit) = Net GloBE Income – SBIE

The Net GloBE Income in the State is determined in accordance with Paragraph 3 of Article 41 of these ERs, and the SBIE is determined in accordance with Article 43 of these ERs.

The Tax (Top-Up Tax) in the State (i.e., Jurisdictional Top-Up Tax) for the Tax Period shall be the positive amount, if any, calculated according to the following formula:

Tax (Top-Up Tax) = (Tax Rate × Taxable Income (i.e., Excess Profit)) + Additional Current Top-Up Tax Rate

The terms stated in the preceding paragraph shall have the following meanings:

  1. Tax Rate: The percentage point difference in the State for the Tax Period.

  2. Taxable Income (i.e., Excess Profits): The taxable income (i.e., excess profit) in the State for the Tax Period.

  3. Additional Current Top-Up Tax: The amount determined or treated as Additional Current Top-Up Tax for the current Tax Period, in accordance with Paragraphs 3 and 4 of Article 34 of these ERs, or Paragraph 1 of Article 47 of these ERs.

Except as provided in Paragraphs 2 and 3 of Article 47 of these ERs, the Tax (Top-up Tax) shall be determined for each CE located in the State that has GloBE Income determined in accordance with Chapter 3 of these ERs for the Tax Period, and which is included in the calculation of the Net GloBE Income in the State, based on the following formula:

Tax (Top-Up Tax) Amount for a CE = Tax (Top-Up Tax) Amount (i.e., Jurisdictional Top-Up Tax) × GloBE Income of the CETotal GloBE Income of All CEs

Tax Amount (i.e., Jurisdictional Top-Up Tax) means the amount determined in accordance with Paragraph 3 of this Article for the Tax Period.

GloBE Income of the CE means the GloBE Income of the CE as determined under Chapter 3 of these ERs for the Tax Period.

Total GloBE Income of All CEs means the total GloBE Income of all CEs located in the State that have GloBE Income for the Tax Period included in the calculation of Net GloBE Income, as per Paragraph 3 of Article 41 of these ERs.

No tax exemptions shall apply to the Tax (Top-Up Tax) imposed under the provisions of this DMTT Law.

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