The treaty sets rules on residency, taxation, and anti-abuse measures, applying from 1 January 2026.
Kuwait and Saudi Arabia’s income tax treaty took effect on 1 August 2025. It covers Kuwaiti income taxes, Saudi income tax, and Zakat.
The treaty was signed on 4 December 2024.
The treaty sets rules on residency, permanent service establishments, withholding tax rates (dividends 5%, interest 0%, royalties 10%), and capital gains taxation. Both countries will use the credit method to avoid double taxation.
An anti-abuse provision limits treaty benefits if obtained for improper purposes. The treaty’s terms apply from 1 January 2026.
Earlier, Kuwait issued Decree-Law No. 80 of 2025 in its Official Gazette on 6 July 2025. The treaty applies to Kuwaiti income taxes, Saudi income tax and Zakat.
