Kuwait: “No objection letters” regarding tax compliance of foreign lenders

Kuwait: “No objection letters”

The tax authority has revised its practice with regard to “no objection letters” issued about the tax compliance of foreign banks with lending transactions in Kuwait. Accordingly, this revised policy may have implications for a foreign lender’s tax compliance obligations.


The tax authority’s prior practice was to review multiple lending transactions to determine whether the foreign lenders complied with certain tax obligations such as registration, annual tax filing, and the presentation of information during the mandatory tax inspection process. Under the new policy, the tax authority can issue, in advance, a “no objection letter” to foreign lenders that have no physical presence in Kuwait, provided that there is a determination under the applicable income tax treaty between Kuwait and the lender’s jurisdiction that interest income is only subject to tax in the lender’s home country. 

Issuance of the advance “no objection letters” is subject to a review on a case-by-case basis. There is no formal guidance, but is based on practices of the tax authority.

Read a March 2021 report [PDF 231 KB] prepared by the KPMG member firm in Kuwait

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