KUWAIT: The Investment Studies Center at the Union of Investment Companies, in collaboration with the PricewaterhouseCoopers PWC, held a seminar on taxation in Kuwait yesterday at the Chamber of Commerce and Industry. The seminar was attended by around 250 participants from different institutions including the Ministry of Finance, Central Bank of Kuwait, Capital Markets Authority, Kuwait Direct Promotion Authority, banks, embassies and various companies.
In view of the tax system which will be introduced soon in Kuwait, the seminar highlighted the latest updates on the issue. In addition, the seminar also reviewed the regional and international trends in taxation, discussed the rules of the Organization for Economic Co-operation and Development (OECD) and tax liability which has significant impact on all institutions today.
Fuad Douglas, Managing Partner at PWC spoke about tax law on foreign companies in Kuwait and the taxes that will be applied soon. He explained that tax retention and its requirements highlighting law No 2/2008 on income tax and executive rule No 27 concerning subcontractors.
Sharif Abdulfatah, Tax Partner at PWC spoke about the banking and investment rules including tax on income from money lending in Kuwait. He also spoke about Islamic finance including Murabaha and Ijara Sukuk, in addition to international tax treaties. He detailed about the Common Reporting Standards (CRS) that will be applied in Kuwait by the beginning of 2018.
"Kuwait is currently working on diversifying its income sources in addition to the oil income. Introducing taxation will preserve the stability of the economy. We expect introduction of Value Added Tax (VAT) in Kuwait by 2018 or 2019," stated Abdulfatah.
Nadeen Baseel, a taxation expert from Lebanon gave a presentation on Value Added Tax (VAT) explaining the features of VAT framework saying that the GCC countries have signed and agreed to the framework. She also spoke about the VAT legislation and regulation including the Federal Tax Authority, recommending the creation of a project team to manage its implementation.
Baseel discussed the fiscal reforms in the GCC and the key VAT principles pointing out that VAT is a tax on consumption. "VAT is levied at each stage in the chain of production or distribution. Also it is a self-assessment system and businesses submit VAT returns on a quarterly basis and make payment to the VAT Authority," she said.
By Nawara Fattahova