Kuwait eyes private sector to invest in country’s infrastructure projects has been saved
Kuwait eyes private sector to invest in country’s infrastructure projects
7 May, 2018 – Kuwait continues to create an encouraging investment climate for the private sector to invest in infrastructure projects. This is according to Deloitte’s latest report “Doing business guide – understanding Kuwait’s tax position,” which finds that the country offers a series of potential benefits to foreign investors including income tax holidays up to 10 years, and exemptions from custom duties for importing relevant equipment and materials into the country.
The Kuwait Direct Investment Promotion Authority (KDIPA) has also introduced a scoring system that is followed when evaluating the issuance and approval of the investment licenses. The aim of the standards is to encourage businesses who have successfully contributed to Kuwait’s economy by offering them a set of incentives on Direct Investment promotion in the State of Kuwait and Executive Regulation. KDIPA has also issued earlier this year a new resolution announcing that the foreign taxpayers could calculate and claim their annual tax credit for their licensed operations. All of this results in promoting investment opportunities in Kuwait,
“Kuwait is opening its doors to foreign investment and encouraging companies to invest in the country to be part of its future development plans. Kuwait has previously announced its “2035” vision, which includes various mega projects,” explains Ihab Abbas, Partner and Tax Leader at Deloitte Kuwait. “The plan will mainly focus on developing North Kuwait and the different islands around the country. The development program is aimed at attracting investment, developing competitiveness, improving legislature to support the economic and social systems whilst creating more than 200,000 jobs. Kuwait has indeed become an attractive landscape for investment opportunities.”
Deloitte’s “Doing Business Guide – Understanding Kuwait’s tax position” provides an overview of the tax position of the country through it’s transition to Value Added Tax (VAT) and other tax changes affecting the GCC country. The guide addresses the key tax considerations for doing business in Kuwait, alongside key legal, economic and market drivers which impact clients who are looking to invest in the country, or those who have been present there for some time, but are looking to undertake a review of their tax exposures, which may include remedial or long term solutions
The Kuwait Government has committed to introducing VAT through the signing of a VAT Treaty along with the rest of the representatives of the Member States of the Gulf Cooperation Council (GCC). The Treaty acts as the basis for the domestic VAT legislation by stipulating certain principles, which must be followed by all members, while allowing Kuwait to opt for different VAT treatments in relation to some supplies. The Kuwaiti government has committed to introduce VAT by signing the main framework agreement with the GCC countries. The draft law has been approved by the Cabinet and is now with the Kuwaiti Parliament for approval.
“The introduction of VAT in Kuwait would entail increased administrative, reporting and record keeping requirements to comply with. VAT - being a consumption tax - would mainly impact end customers through price hike, although business may experience narrowing margins and increased price competition after the introduction of VAT. Experience from the UAE and KSA shows that those business which prepared on time could gain competitive advantage and avoid business disruptions after VAT was introduced,” added Robert Tsang, Indirect Tax Partner, Deloitte Middle East.
To view the whole report, click here.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms and their related entities are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.
Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and high-quality service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 245,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn, or Twitter.
Deloitte's professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.
About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926. DTME’s presence in the Middle East region is established through its affiliated independent legal entities, which are licensed to operate and to provide services under the applicable laws and regulations of the relevant country. DTME’s affiliates and related entities cannot oblige each other and/or DTME, and when providing services, each affiliate and related entity engages directly and independently with its own clients and shall only be liable only for its own acts or omissions and not those of any other affiliate.
Deloitte provides audit, tax, consulting, financial advisory and risk advisory services through 25 offices in 14 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years, which include bestAdvisory and Consultancy Firm of the Year 2016 in the CFO Middle East awards, best employer in the Middle East, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.