GTL Summary:

Ministerial Decision No. 55 of 2025, implementing Kuwait's DMTT framework under Decree-Law No. 157 of 2024, establishes in Article 61 a safe harbour for Non-material Constituent Entities (CEs). It allows a Designated CE to annually elect for simplified calculations for income, revenue, and adjusted covered taxes, based on Country-by-Country Reporting (CbCR) legislation. This applies to CEs not consolidated on a line-by-line basis due to materiality. The provision references OECD BEPS Action 13 guidelines and requires specific accounting standards for CEs with revenues over EUR 50 million.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-61
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 61 - Safe Harbor by Simplified Calculation Method for Non-material CEs
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 8 - SAFE HARBOR AND INITIAL PHASE OF INTERNATIONAL ACTIVITY

Article 61 - Safe Harbor by Simplified Calculation Method for Non-material CEs

To determine eligibility for the Safe Harbor by Simplified Calculation in the State, the DCE may make an annual election to determine the income or loss, or revenues and adjusted covered taxes of the non-material CE by using simplified calculations for the non-material CE.

A non-material CE means an Entity, including its PEs, which is not consolidated on a line-by-line basis in the CFS of the UPE due to size or materiality, and that qualifies as a CE, provided that all of the following are met:

  1. These CFS are those that are prepared according to either clause (1) or (3) of the definition of CFS.

  2. The CFS are externally audited.

  3. In the case of a CE with a Total Revenue that exceeds EUR 50 million (or the equivalent in Kuwaiti dinars), its financial accounts that are used to complete the CbCR are prepared in accordance with an Acceptable Financial Accounting Standard or an Authorized Financial Accounting Standard.

When using simplified calculations for the non-material CE, the following calculations related to the non-material CE shall be applied for purposes of tests related to safe harbor by simplified calculation:

  1. Simplified Income Calculation - The GloBE income of the non-material CE equals the revenue determined according to the legislation related to CbCR.

  2. Simplified Revenue Calculation - The revenue of the non-material CE equals the revenue determined according to the legislation related to CbCR.

  3. Simplified Tax Calculation - Under the Simplified Tax Calculation, the Adjusted Covered Taxes of a Non-Material CE is equal to its Income Tax Accrued (for the Current Tax Period) as determined in accordance with the Relevant Country-by-Country Regulations.

Legislation related to CbCR means the CbCR laws in the jurisdiction of the UPE or in the State of the Surrogate Parent Entity if such reports are not submitted in the State of the UPE. If the State of the UPE does not have specific legislation regarding CbCR, and the MNE Group is not obligated to submit such reports in any jurisdiction, then the legislation related to CbCR refers to the OECD’s final report for Action 13 on Base Erosion and Profit Shifting (BEPS) and the OECD guidelines on the "Implementation of Country-by-Country Reporting" issued on October 5, 2015.

The executive rules and instructions, or circulars issued by the Tax Administration shall determine the controls and conditions related to the application of the provisions of this Article.

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