Article 7 of Kuwait's Decree-Law No. 157 of 2024 establishes the formula for calculating the Effective Tax Rate (ETR) for a taxpayer group. The ETR is determined by dividing the total adjusted covered taxes of the group's taxable entities by their aggregate net income or loss. The Article mandates the specific exclusion of certain entities from this jurisdictional calculation. The adjusted covered taxes and net income or loss attributable to investment entities, minority-owned participating entities, and stateless entities are not to be included. Further detailed controls and conditions for applying this ETR calculation will be provided in executive regulations.
Chapter 3 - Tax Imposition and Entitlement
Article 7 - Effective Tax Rate Calculation
The effective tax rate for the taxpayer is calculated based on the total adjusted covered taxes for the taxable entities within a group, divided by the total net income or loss of the group.
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