Finance Ministry to tax-delinquent companies: ‘Settle dues or face legal action’

The Ministry of Finance has issued a firm reminder to companies that have defaulted on their income tax obligations, urging them to settle outstanding dues without delay.

The ministry has emphasized that failure to comply may result in legal action, as per the applicable tax laws and regulations, reports Al-Jarida daily.

In a letter addressed to a company with overdue payments, the ministry clarified that defaulters must transfer the owed amounts directly to the ministry’s designated bank account, or alternatively, submit a certified check for the tax due from previous fiscal years to the Tax Inspection and Claims Department.

The ministry cited Article 8 of Income Tax Decree No. 3 of 1955, as amended by Law No. 2 of 2008, which imposes a penalty of 1% for every 30 days — or part thereof — for late payment. The law underscores the financial repercussions of non-compliance, especially as it pertains to foreign companies operating in Kuwait.

It is worth noting that the Kuwaiti income tax law mandates a 15% tax on the annual net profits of foreign entities conducting business in the country. This framework is governed by the original 1955 decree and its amendments, which are enforced through the executive regulations currently in place.

The ministry’s letter serves as a final warning, especially in cases involving long-outstanding tax liabilities from previous fiscal years. Companies are urged to act swiftly to avoid accruing further penalties or facing enforcement through the judiciary.