In the past, Kuwait's Tax Authority (KTA) had reviewed multiple lending transactions and considered that foreign lenders should fulfill Kuwait's tax compliance obligations, including registration, annual tax filing, and presenting information during the mandatory tax inspection process.
However, it appears the KTA is now able to issue an advance NOL to foreign lenders with no physical presence in Kuwait, subject to determining that under the applicable treaty between Kuwait and the lender’s jurisdiction that interest income should only be taxed in the lender’s home country.
Issuance of the advance NOL is subject to a review on a case-by-case basis. There is no formal guidance on this issue but rather based on internal practices of the KTA.
The issues surrounding tax are constantly evolving, both locally and globally. Changes in law, practice, or in the approach of tax authorities, can have major ramifications.
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