GTL Summary:

Ministerial Decision No. 55 of 2025 establishes Kuwait's DMTT framework under Decree-Law No. 157 of 2024. Article 62 introduces a Transitional Country-by-Country Reporting (CbCR) Safe Harbor, aligning with OECD Pillar Two guidance. This provision allows an MNE Group's Top-Up Tax to be deemed zero for tax periods until 31 December 2026. To qualify, MNEs must file a qualified CbCR and meet one of three tests: a de minimis threshold (<€10m revenue), a simplified Effective Tax Rate (ETR) test, or a routine profits test.

Document Type: ERS - Executive Regulations
Law: QDMTT Law (Decree-Law no. 157 of 2024)
Decision Number: executive-regulations-55-article-62
Year: 2025
Country: 🇰🇼 Kuwait
Official Name: Article 62 - Transitional Safe Harbor for Country-by-country Reporting
Last updated at: 2026-02-23 12:13:40 UTC

CHAPTER 8 - SAFE HARBOR AND INITIAL PHASE OF INTERNATIONAL ACTIVITY

Article 62 - Transitional Safe Harbor for Country-by-country Reporting

An MNE Group must submit a qualified CbCR based on Qualified FS in order to be eligible for the Transitional Safe Harbor for CbCR (“TCSH”).

Based on the election of the DCE, the Tax (Top-Up Tax) Due shall be zero for any Tax Period starting on or before 31 December 2026, provided that no part of the Tax Period ends after 30 June 2028, in any of the following cases:

  1. If the following two conditions are met:

    1. The total revenues of the Taxable Entities of the MNE Group are less than EUR 10 million (or its equivalent in Kuwaiti Dinar) in the State.

    2. The total income before tax of the Taxable Entities of the MNE Group is less than EUR 1 million (or its equivalent in Kuwaiti Dinar) in the State.

    2. The totals are computed based on the Qualified Country-by-Country Report for the tested Tax Period.

  2. If the Simplified ETR of the MNE Group in the State is at least 16% for Tax Periods starting in 2025, and at least 17% for Tax Periods starting in 2026, based on qualified CbCR.

  3. If the group's total net pre-tax income is equal to or less than the SBIE amount, as per Article 10 of the DMTT Law, for CE resident in the State and in accordance with qualified CbCR rules.

The Simplified ETR is calculated by dividing the Simplified Covered Taxes by the total pre-tax income, based on the MNE’s qualified CbCR.

If the MNE Group does not elect to apply Article 15 of the DMTT Law for the Tax Period in which it becomes subject to the DMTT Law during the transitional period, it cannot apply the Article in a subsequent Tax Period.

If the MNE Group is not obligated to submit a CbCR, this Article may still apply, provided that the Taxpayer includes in its Tax Return data derived from Qualified Financial Data that would have been included in such reports.

Transitional Period covers all Tax Periods beginning on or before 31 December 2026, excluding any period ending after 30 June 2028.

Qualified CbCR are reports prepared and filed using Qualified FS.

Qualified FS means:

  1. Financial accounts used to prepare the CFS of the UPE.

  2. Standalone FS for each CE, provided that it is prepared in accordance with the financial accounting standard of the State, or an Acceptable or Authorized Financial Accounting Standard, provided that the information is maintained and is reliable based on such standards.

  3. In the case that a CE is not included in an MNE group’s consolidated line-by-line basis solely due to size or materiality, the Qualified FS means the financial accounts of that CE that are used to preparation of the MNE group’s CbCR.

Simplified Covered Taxes means the income tax expense in the State as reported in the Qualified FS, excluding any non-covered taxes and uncertain tax positions that are included in the Qualified FS of the MNE group.

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