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
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.