Bank proposes deducting scientific share from corporate taxes
The article discusses a banking proposal aimed at deducting the "Scientific Advancement" share, amounting to 1% of the fixed income tax applied to the profits of Kuwaiti joint-stock companies. These companies generate annual revenues exceeding 750 million euros and operate in both local and international markets. The proposal justifies that withholding this share is a sustainable financial obligation to support the Kuwait Foundation for the Advancement of Sciences. Deducting it within the tax system would enhance tax fairness and reduce the burden on local companies, without increasing taxes on foreign companies, which currently enjoy certain tax advantages. The bank suggests that if local companies continue paying the "Scientific Advancement" share, their total tax rate would rise to 16% instead of 15%. This could create an imbalance in treatment compared to foreign companies, which still pay only 15%. However, there are concerns that part of the deduction might end up in foreign jurisdictions outside the budget, with ongoing legal discussions about the entitlement to deduct it from the 15% tax rate. Legal experts argue that such deductions could be offset against taxes owed by companies in other countries, potentially leading Kuwait to lose 1% of its due tax revenue. As of now, the Ministry of Finance has not made a final decision, and the debate continues over the best approach to fairly serve Kuwait’s interests.
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