The shareholding companies listed on the stock exchange market must get ready once again or show their commitment to pay 1 percent of their net profits annually as a condition for holding annual general assembly meetings as the Ministry of Commerce and Industry is preparing to issue in the near future, a new procedural amendment related to the requirements for holding general assembly meetings for companies particularly the shareholding companies.
In this regard, a local Arabic daily has learned that the ministry officials are preparing to issue a decision linking the listed companies’ commitment to pay the share owed by them to the Kuwait Foundation for the Advancement of Sciences.
The expected decision will link the annual general assembly meetings of joint-stock and holding companies to the payment of their share to KFAS, which are established in accordance with Law No. 46 of 2006 regarding zakat and the contribution of public and closed joint-stock companies to the state budget of one percent to prevent from being suspended.
It is said, the Kuwaiti companies do not pay direct taxes, but they are obliged to pay a percentage of their profits to support national labor and the Kuwait Foundation for the Advancement of Sciences, and an additional percentage as zakat on money, estimated in total at 4.5 percent, while foreign companies pay profits estimated at 15 percent according to a legislative amendment made in 2008, which is a lower rate than the previous rate, which was up to 55 percent.
Taxes are imposed on the profits of joint-stock companies, which come at about 1 percent zakat, 2.5 percent to support national labor and 1 percent as a share to the institution, while taxes are imposed on the profits of closed joint-stock companies at 1 percent zakat and 1 per cent of the institution’s share.
Over the past years, Commerce Ministry had disrupted this obligation, as companies were no longer obliged during that time to provide proof that they had paid the institution’s share in order to acquire the date to hold their annual general assembly meetings, so that the Ministry at that time had an opinion that argued that the link between the two issues was illegal.