UAE’s Cabinet of Ministers have approved the income tax treaty with Kuwait.

The treaty was signed on 11 February 2024. It is the first income tax treaty between the two countries.

The agreement seeks to prevent double taxation on transactions and investments between the two nations while also combating tax evasion and avoidance. As stipulated in Article 31 (Entry into Force), the treaty will take effect from 1 January of the year following the exchange of ratification instruments.

The treaty applies to the following taxes in both jurisdictions:

  • Kuwait’s National Labor Support Tax (Law No. 19 of 2000), which applies to companies listed on the Kuwait Stock Exchange.
  • Kuwait’s Income Tax Law for the Designated Region (Law No. 23 of 1961) and Income Tax Decree No. 3 of 1955, as amended by Law No. 2 of 2008, applicable to corporate entities.
  • The UAE’s income tax and corporate tax.

Earlier, the Kuwait government ratified the tax treaty with UAE on 13 July 2024.