Kuwait Implements Decree-Law for Tax Information Exchange: Key Provisions and Penalties
The Council of Ministers in Kuwait has recently issued Decree-Law No. 6 of 2024, which focuses on enhancing transparency and compliance with international tax agreements through the exchange of information for tax purposes. This new legislation introduces several key provisions that will impact entities and individuals in Kuwait.
One of the main points of the decree-law is the requirement for all entities and individuals in Kuwait to provide the competent authority with necessary information as per the law, its executive regulations, and international tax agreements. This includes both automatic information exchange and responding to requests from the Ministry of Finance within 21 days.
The scope of information request under this new law allows the competent authority to collect information from any person or entity within Kuwait’s territory as required under international tax information exchange agreements. Financial institutions are also mandated to annually collect and report required information to the competent authority by May 31 of the following year, ensuring the accuracy of reported information through auditing by approved auditors.
Compliance and procedures are also emphasized in the decree-law, with reporting financial institutions required to establish internal procedures, appoint compliance officers, and adhere to due diligence requirements, including obtaining valid self-certification forms from customers when opening accounts. Additionally, financial institutions must retain documents related to non-reportable accounts for at least six years following the end of the year in which due diligence procedures were applied.
Penalties for non-compliance, failure to submit information accurately and timely, or violating due diligence procedures range from 10,000 to 20,000 Kuwaiti dinars for individuals and financial institutions. Overall, this legislation aims to align Kuwait’s tax practices with international standards, facilitating the exchange of tax information while ensuring compliance and transparency in financial transactions.