Kuwait, Saudi Arabia double taxation agreement becomes effective
The Decree-Law No. 80 of 2025 has been officially issued, approving the agreement between the Government of Kuwait and the Government of the Kingdom of Saudi Arabia to avoid double taxation on income and to prevent tax evasion and avoidance.
The agreement, signed in Riyadh on December 4, 2024, has now entered into force following its publication in the Official Gazette, Kuwait Alyawm today.
Article 1 outlines the scope of the agreement, specifying the individuals and entities covered, including special provisions for income derived through certain arrangements. Article 2 identifies the types of taxes covered, not only those currently imposed but also any future taxes introduced by either country after the agreement’s signing.
The core of the agreement, detailed in Articles 6 to 20, addresses the treatment of various types of income, including income from real estate, business activities, transport sectors (land, sea, and air), partnerships, dividends, interest on debts, royalties, technical services, capital gains, independent and dependent personal services, directors’ fees, as well as income earned by artists, athletes, and government employees through pensions or services.
Articles 21 and 22 list the exemptions granted under the agreement, specifying that teachers, researchers, students, and trainees will not be subject to the relevant income taxes during their time in the host country. The implementation of this agreement aims to boost cross-border investment, reduce tax-related burdens, and strengthen economic cooperation between Kuwait and Saudi Arabia.
