Cabinet approves 15% Global Minimum Tax on multinationals

The Cabinet during its regular weekly meeting at Bayan Palace, chaired by His Highness the Prime Minister Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah. endorsed on 24 December a draft resolution, on issuing a law imposing a 15 percent Global Minimum Tax (GMT) on multinational entities that have business in more than one country or state.

In a media-briefing statement following the Cabinet meeting, Deputy Prime Minister and Minister of State for Cabinet Affairs Shereeda Al-Mousherji said that with the cabinet approval the law will come into effect as of 1 January 2025.

The GMT. initially proposed by the Organisation for Economic Co-operation and Development (OECD) in 2021, represents a major step forward in international cooperation on the taxation of multinational enterprises (MNEs). The deal, which imposes a minimum effective rate of 15 percent on corporate profits, aims to end the benefit of shielding multi-million dollar profits in tax havens. The deal has been signed by 140 countries so far.

The GMT will ensure that MNEs with revenues above EUR 750 million are subject to a 15 percent effective minimum tax rate wherever they operate. It aims to address the tax challenges arising from the globalisation and digitalisation of the economy.

The OECD estimates the Global Minimum Tax (GMT) policy will reduce under-taxed profits by around 80 percent, as it applies across geographies, national income boundaries and tax haven structures.

The Cabinet during its weekly meeting also extolled the exemplary organization of the opening ceremonies of the Arabian football cup, KhaleejiZain 26 at the Jaber Al-Ahmad International Stadium on 21 December, under the auspices of, and in the presence of, His Highness the Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, and in attendance of His Highness the Crown Prince Sheikh Sabah Khaled Al-Hamad Al-Sabah.

The cabinet pointed out that opening ceremonies of the KhaleejiZain 26 tournament, which is currently being held in Kuwait from 21 December to 3 January 2025, was remarkable and expressed gratitude to all teams involved in organizing the event.

The Cabinet commended the role by Minister of Information and Culture, and Minister of State for Youth Affairs and head of the supreme organizing committee Abdulrahman Al-Mutairi, and all members and heads of sub-committees, as well as Chairman of Kuwait Football Association Sheikh Ahmad Yusuf Saud Al-Sabah, along members, Acting Director General of the Public Authority for Sports Bashar Abdullah, all officials, public and private sectors, volunteers and civil society organizations.

The Cabinet was also informed by His Highness the Prime Minister on the outcome of the visit by the Indian Prime Minister Narendra Modi and his accompanying delegation to Kuwait on an official visit last week.

The Kuwaiti premier also provided the cabinet with a gist of Modi’s meetings with His Highness the Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah and His Highness the Crown Prince Sheikh Sabah Al-Khaled Al-Hamad Al-Sabah. His Highness the Prime Minister also referred to his official talks that he held with his Indian peer, which focused on means of boosting bilateral historic relations for wider horizons in all fields to serve the two peoples’ interest.

The prime minister also highlighted a defense memorandum of understanding signed between the Kuwait and Indian governments, in addition to a sports executive program for 2025-2028 and other deals on enhancing cooperation between the two sides.

His Highness the Prime Minister also told the ministers that Kuwait and India agreed, during a joint statement, on upgrading their ties to the strategic partnership based on deep-seated and cordial relations.

Furthermore, First Deputy Prime Minister, Minister of Defense and Minister of Interior Sheikh Fahad Yusuf Saud Al-Sabah detailed the ministers about the results of his official visit to Saudi Arabia on Sunday and Monday, and official talks with Saudi Interior Minister Prince Abdulaziz bin Saud bin Naif bin Abdulaziz.

He said they discussed security topics of mutual concern, and reviewed means of boosting security ties between the two states He further stated that they focused on a mechanism of coordinating joint efforts to face international and regional challenges in a manner that achieves security and stability in the two states..

Sheikh Fahad Yusuf Al-Sabah also briefed the cabinet on the results of his official visit to Iraq’s Basra Governorate last Wednesday, where he inaugurated the Surgical Hospital in Basra, which was granted by the Kuwaiti government. He stressed that the opening of the hospital reflects the depth of fraternal ties between the two countries and embodies Kuwait’s firm belief in the importance of cooperation and joint work with Iraq.

In light of the Council of Ministers’ interest in implementing infrastructure projects for housing cities, reducing the waiting period and accelerating the distribution of housing units to those entitled to housing care, the cabinet decided to assign the Ministry of Public Works, in coordination with the Public Institution for Housing Care, and the entities it deems appropriate, to quickly conclude contracts to implement permanent sewage treatment plant projects for cities, areas and residential suburbs that are currently being built or planned, in a manner that ensures the delivery of these projects on time.

On another front, the ministers reviewed the visual presentation submitted by Minister of State for Communications Affairs Omar Saud Al-Omar regarding the executive position of the framework agreement between the State of Kuwait and Google Cloud Company, and listened in this regard to an explanation provided by the Chairman of the Supervisory Committee for the Implementation of the Agreement.

The Council of Ministers decided to assign ministers and government agencies to cooperate with the Supervisory Committee to implement the agreement and overcome all obstacles facing it, and tasked the committee to provide the cabinet with a report every three months that includes the latest developments regarding the implementation of the agreement.