KUWAIT: The Ministry of Finance and Kuwait Direct Investment Promotion Authority reached an agreement to launch Apple Pay in Kuwait soon. The two sides are currently working on removing obstacles that had prevented launching the service in Kuwait.

Details of the agreement could not be obtained as of this writing. The Ministry of Finance had reportedly made a proposal for Apple last year to enter Kuwait through Kuwait Direct Investment Public Authority (KDIPA) to ensure its listing on the roster of foreign companies that are exempt from paying taxes under double taxation treaties. The US technology giant had postponed entering Kuwait through its Apple Pay service, and the ministry reportedly held several meetings with company representatives to explain its tax situation in case it signed up with local banks to apply the Apply Pay service.

According to sources familiar with the meetings, Apple first asked the finance ministry to exempt it from the rule that stipulates a 5 percent deduction from the total returns of Apple Pay in Kuwait. Apple argued it should not be considered an investment that must pay taxes, as the company presented a description of its financial payment service done through apps and not through its presence in Kuwait, which it argues exempts it from any local taxes.

But finance ministry officials were reportedly not convinced at the time, said the sources who spoke on the condition of anonymity. "They believe that activating the Apple Pay service locally will constitute moving of money outside Kuwait to a foreign company, as Apple will collect a percentage of each transaction from banks that use its payment services, be they Kuwaiti or others,” the sources explained. "They insist Apple must pay taxes as the law stipulates, which is at five percent in this regard.” Ministry officials also believe that even if the company doesn’t have premises in Kuwait, this will not exempt it from paying taxes as long as it benefits from the country’s markets, the sources noted.