The Kuwait Tax Authority (KTA) has announced stricter regulations regarding the disposal and destruction of fixed assets, focusing on compliance with the current Executive Rules of the Kuwait tax law.
Taxpayers are now required to notify the KTA at least 30 days before any disposal and must arrange for inspections by KTA officials to observe the process.
Non-compliance with the new requirements can result in the disallowance of losses on disposed assets and the imposition of capital gains taxes, affecting taxpayers’ final liabilities.
Under Income Tax Decree No. 3 of 1955, capital gains from disposals are taxed at 15%, while losses are generally deductible. Executive Rule No. 31 specifies that taxpayers must provide necessary documentation for gains or losses on disposals, which may include proof of payments, although this is not explicitly required.
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