Article 60 - Safe Harbor by Simplified Calculation Method

Tax (Top-Up Tax) shall be considered zero for the Tax Period when applying the simplified calculation method for the MNE group, given that one of the following tests is satisfied for its operations in the State:

1. Routine Profit Test.

2. De Minimis Test.

3. Simplified ETR Test.

For purposes of verifying eligibility under any of these tests, the CE may use any of the following:

1. Simplified Income Calculation.

2. Simplified Revenue Calculation.

3. Simplified Tax Calculation.

When applying any of these methods, the results must be consolidated with the accounts of the CEs that do not qualify as non-material CE, as described in Article 61 of these ERs.

An MNE Group is considered to have satisfied the tests referred to in the first paragraph of this Article as follows:

1. Routine profit test is satisfied if the GloBE Income in the State, based on the simplified income calculation, is equal to or less than the amount resulting from the calculation of SBIE in accordance with Article 10 of the DMTT Law.

2. De Minimis Test is satisfied if the average total revenue of the taxable Entities in the MNE Group in the State is less than EUR 10 million (or the equivalent in Kuwaiti dinars), and the average GloBE Income of the Taxable Entities in the MNE Group in the State is less than EUR 1 million (or the equivalent in Kuwaiti dinars), according to Article 13 of the DMTT Law.

3. Simplified ETR Test is satisfied if the ETR in the State is not less than 15% based on simplified income and simplified tax calculation.

The average total revenues and the average GloBE income are calculated for the current Tax Period and the two preceding periods.

The Executive Rules, instructions and circulars issued by the Tax Administration will specify controls and conditions related to the application of the provisions of this Article.