GTL Summary:

Ministerial Decision No. 55 of 2025 establishes Kuwait's DMTT framework under the DMTT Law. Article 50 provides specific rules for applying the EUR 750 million consolidated revenue threshold to Multinational Enterprise (MNE) Groups undergoing mergers or demergers. For mergers, the threshold is tested by combining the historical revenues of the merging groups from the preceding four tax periods. For demergers, a newly formed 'Separate Group' must meet the threshold in the demerger year and in at least two of the subsequent three tax periods. The Article defines 'merger' and 'demerger' for these purposes.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-50
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 50 - Application of the Consolidated Revenue Threshold to Group Mergers and Demergers
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 6 - CORPORATE RESTRUCTURINGS AND HOLDING STRUCTURES

Article 50 - Application of the Consolidated Revenue Threshold to Group Mergers and Demergers

The Consolidated Revenue Threshold to group mergers and demergers is determined according to the following provisions:

  1. When two or more Groups merge to form a single Group during any of the four Tax Periods preceding the tested Tax Period, the Revenue Threshold for the MNE Group shall be considered met for any Tax Period prior to the merger if the combined revenues included in the CFS of each Group during that period equals or exceeds EUR 750 million (or its equivalent in Kuwaiti Dinar).

  2. When an Entity that is not a member of any Group (the "Target Entity”) merges with an Entity or Group (the "Acquiring Party”) during the tested Tax Period, and neither the Target Entity nor the Acquiring Party had CFSs during any of the four Tax Periods preceding the tested period, the Revenue Threshold for the MNE Group shall be considered met for that Tax Period if the total revenues included in the FS or the CFS of each party during that period equal or exceed EUR 750 million (or its equivalent in Kuwaiti Dinar).

  3. In the case of a demerger of one MNE Group subject to the scope of the law or the GloBE Rules into two or more Groups (each referred to as a "Separate Group”), the Revenue Threshold shall be considered met by the Separate Group as follows:

    1. For the first tested Tax Period (referred to as the "year of demerger”) that ends after the demerger occurred, the Revenue Threshold shall be considered met if the annual revenues of the Separate Group during that period equal or exceed EUR 750 million (or its equivalent in Kuwaiti Dinar).

    2. For the second through fourth Tax Periods ending after the demerger, the Revenue Threshold shall be considered met if the annual revenues of the Separate Group equal or exceed EUR 750 million (or its equivalent in Kuwaiti Dinar) in at least two of the Tax Periods following the year of demerger.

If a non-Group Entity (the "Target Entity”) merges with an Entity or Group (the "Acquiring Party”) and their Tax Periods before the merger do not align, the revenues of the merged Group must be calculated by aggregating the revenues of the relevant Entities for the fiscal period ending in (or during) the fiscal period adopted by the Group after the merger.

A merger is considered to have occurred if any of the following arrangements take place:

  1. All or most of the member Entities in the Separate Groups come under common control in a way that results in the formation of a merged Group of Entities.

  2. A non-Group Entity comes under common control with another Entity or Group, leading to the formation of a merged Group of Entities.

Demerger means any arrangement under which a Group of Entities within one Group is split into two or more groups such that those Entities are no longer consolidated for accounting purposes under the same UPE.

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