Ministry’s approach forms part of Kuwait’s wider economic reform programme under Kuwait Vision 2035, with the multinational tax framework aimed at strengthening non-oil revenue sources and improving the efficiency of public revenue collection while encouraging private-sector participation.
The Ministry of Finance has introduced an advance tax payment option for multinational companies subject to Kuwait’s 15 percent tax, with a local bank taking the lead by paying about 50 million dinars against its expected tax liability for 2025.
The mechanism applies to multinational entities operating across more than one country or jurisdiction with annual revenues starting at 750 million euros. The tax came into effect on January 1, 2025. Under the advance payment mechanism, companies can voluntarily pay their estimated tax liability to the Ministry of Finance before the payment deadline.
In return, companies opting for early payment receive priority in the tax audit process. For large corporate groups, tax audits can involve detailed reviews of financial records, classifications and supporting documentation. The advance-payment mechanism therefore provides companies with an opportunity to have their tax position reviewed earlier and address any accounting differences or documentation issues within the prescribed period.
Bank accounts for 44 percent of 2025 payments
Around five companies have so far benefited from the advance-payment option for the 15 percent tax. One Kuwaiti bank has paid approximately 50 million dinars, representing its expected tax liability on its 2025 financial results.
Four foreign companies operating in Kuwait have also made advance payments, with amounts ranging from 100,000 to 600,000 dinars. The Ministry is also in discussions with another bank over a potential advance payment of approximately 60 million dinars for the first year of the law.
The 50 million dinar payment, together with the potential payment under discussion, highlights the role of financial institutions in the early implementation of the multinational tax framework. According to the source, the amount already paid by one bank represents around 44 percent of the total tax due from multinational entities for 2025, with the figure expected to rise if the second bank proceeds with its payment.
2025 remains the focus of current tax discussions
The Ministry’s current discussions with multinational and potentially affected companies relate exclusively to 2025 tax liabilities. Tax assessments for 2026 are not yet included, pending completion of fourth-quarter financial data. The Ministry expects tax collections from multinational companies on its lists to remain at around 250 million dinars, or approximately $800 million, for fiscal year 2025.
The number of entities registered under the multinational tax framework could exceed 300 groups, compared with an earlier estimate of 300. The group includes around 45 Kuwaiti and Gulf groups and 255 foreign groups operating in Kuwait.
Some companies have registered with the Ministry as a precaution because they could potentially reach the 750 million euro revenue threshold. Registration itself does not mean a company will have to pay tax if its revenues remain below the applicable minimum threshold.
Compliance and accounting controls
The advance-payment mechanism also places greater emphasis on the alignment between companies’ financial records and their tax declarations. Companies using the option can have their tax position reviewed earlier, allowing potential accounting differences, incorrect classifications or missing supporting documents to be identified and corrected within the required timeframe.
The process also provides an opportunity to assess whether companies’ accounting systems and submitted financial information meet the Ministry’s tax and accounting requirements.
The Ministry’s approach forms part of Kuwait’s wider economic reform programme under Kuwait Vision 2035, with the multinational tax framework aimed at strengthening non-oil revenue sources and improving the efficiency of public revenue collection while encouraging private-sector participation.
