GTL Summary:

Ministerial Decision No. 55 of 2025 implements Kuwait's DMTT framework under Decree-Law No. 157 of 2024. Article 55 provides tax neutrality rules for an Ultimate Parent Entity (UPE) that is a Flow-through Entity. It permits the reduction of the UPE's GloBE Income attributable to its owners if they are subject to a tax rate of at least 15%. The reduction also applies if the owner is a natural person, Governmental Entity, or other specified entity holding 5% or less ownership. GloBE losses and Covered Taxes are reduced proportionally.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-55
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 55 - UPE That Is Considered a Flow-through Entity
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 7 - TAX NEUTRALITY AND DISTRIBUTION REGIMES

Article 55 - UPE That Is Considered a Flow-through Entity

The GloBE income for the Tax Period of the Entity that is a Flow-Through Entity and considered the UPE of the MNE Group shall be reduced by the amount of GloBE Income attributable to each Ownership Interest, in any of the following cases:

  1. If the holder of the Ownership Interest is subject to income tax on the full amount of such income for a Tax Period ending within twelve (12) months after the end of the Tax Period of the MNE group, and any of the following conditions is met:

    1. The holder of the Ownership Interest is subject to income tax on the full amount of such income at a nominal rate equal to or exceeding the Minimum Tax Rate; or

    2. It can be reasonably expected that the aggregate amount of adjusted covered taxes for the UPE and other Entities in the tax-transparent structure, together with the taxes of the owner of the ownership interest applied to this income, equals or exceeds the amount resulting from multiplying the full amount of this income by the minimum tax rate.

  2. If the holder is a natural person that fulfills the following conditions:

    1. is a tax resident in the UPE Jurisdiction or the State; and

    2. holds Ownership Interests that, in the aggregate, are a right to 5% or less of the profits and assets of the UPE.

  3. If the owner is a Governmental Entity, an International Organization, a Non-Profit Organization, or a Pension Fund that fulfills the following conditions:

    1. Is a resident in the UPE jurisdiction or the State; and

    2. Holds Ownership Interests that, in the aggregate, are a right to five percent (5%) or less of the profits and assets of the UPE.

The GloBE loss of a Flow-Through Entity considered the UPE of the MNE Group shall be reduced by the amount of the GloBE loss attributable to each Ownership Interest, except to the extent that the holders of Ownership Interests are not allowed to use the loss in their separate taxable income for tax purposes.

A Flow-Through Entity that reduces its GloBE Income pursuant to the above shall reduce its Covered Taxes proportionally in accordance with the first paragraph of this Article.

The provisions of this Article apply to any PE in any of the following cases:

  1. A PE through which a Flow-Through Entity that is the UPE of an MNE Group wholly or partly carries out its business; or

  2. A PE through which the business of a Tax-Transparent Entity is wholly or partly carried out if the UPE’s Ownership Interest in that Tax-Transparent Entity is held directly or through a tax-transparent structure.

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