Executive summary

On 29 April 2026, the Kuwaiti Ministry of Finance (MoF) issued Circular No. (1) of 2026 (Circular), introducing an advance payment mechanism for taxpayers who are covered under the Multinational Entities Group Tax Law (MNE Tax Law) issued by Decree-Law No. (157) of 2024.

The Circular allows taxpayers registered under the MNE Tax Law to opt into an advance payment system by, no later than 30 June 2026, submitting a provisional tax statement and paying the estimated tax liability in a single lump sum prior to filing the final tax return. Taxpayers opting into this system should continue to file a final tax return with the tax administration within 15 months from the end of the relevant tax period as per Article (20) of the MNE Tax Law.

The advance payment system is intended to streamline tax assessments, support administrative efficiency and provide certain administrative benefits to taxpayers opting for the advance payment system.

The Circular applies to taxpayers with tax periods starting on or after 1 January 2025 and ending on or before 31 March 2026, subject to the prescribed eligibility conditions and deadlines set by the Kuwait Tax Administration. The Circular is effective from the date of its issuance, i.e., 29 April 2026.

Background

The MNE Tax Law, issued by Decree-Law No. (157) of 2024, introduced Domestic Minimum Top-up Tax (DMTT) in Kuwait in response to the Pillar Two framework of the Organisation for Economic Co-operation and Development (OECD). The MNE Tax Law is supplemented by Executive Regulations issued under Ministerial Decision No. (55) of 2025.

Under Article (20) of the MNE Tax Law, taxpayers are required to file a tax return within 15 months from the end of the relevant tax period, and any tax due must be paid by the same deadline. However, pursuant to the Circular, taxpayers may make an advance payment on or before 30 June 2026, provided that the prescribed form is duly submitted to the MoF on or before 31 May 2026.

Key provisions of the Circular

Definitions

The Circular introduces the following definitions:

• Provisional tax statement: A tax statement that includes the calculation of the preliminary tax payable for a tax period.
• Advance payment system: A system that allows the taxpayer to make an advance payment of the tax due for a tax period prior to the statutory deadline for filing the tax return by submitting a provisional tax statement in accordance with the provisions of the Circular. The settlement of the final tax liability is required to be completed upon submission of the tax return within the timelines specified under the MNE Tax Law.

The advance payments apply to taxpayers subject to the MNE Tax Law whose taxable periods start on or after 1 January 2025 and end on or before 31 March 2026, in accordance with procedures and controls to be determined by the Kuwait Tax Administration.

Participation in the advance payment system is optional and requires taxpayers to make a formal request to the Kuwait Tax Administration.

Provisional tax statement

The Circular provides a template for the provisional tax statement that taxpayers should complete when opting to pay in advance.

Key information to be disclosed in the provisional tax statement includes:

• Tax Identification Number (TIN) or MNE Tax Law serial number
• Name of the MNE Group
• Name of the appointed Constituent Entity
• Start and end dates of the taxable period
• Estimation of the tax due in Kuwait for the relevant taxable period, including:
• Global Anti-Base Erosion (GloBE) income computation
• Substance-Based Income Exclusion (SBIE) computation
• Applicable top-up tax percentage
• Estimated top-up tax due
• Confirmation that the provisional tax statement is prepared in good faith, based on the best available information at the time of submission

Advance payments — process and deadlines

Taxpayers electing to participate in the advance payment system should submit a formal request to the MoF by 31 May 2026. Upon approval, taxpayers should submit the provisional tax statement and pay the estimated tax liability in a single payment by 30 June 2026.

Amounts paid under the advance payment system are treated as payments on account and will be reconciled against the final tax liability upon submission of the statutory tax return under the MNE Tax Law.

Administrative benefits of advance payment participation

The Circular indicates that taxpayers complying with the advance payment and provisional filing requirements may be eligible for certain administrative benefits, including:

• Accelerated inspection and assessment procedures
• Priority handling of refunds, objections and tax grievances
• Priority issuance of MNE tax card

Implications

The issuance of the Circular represents a welcome and pragmatic development in the early stages of implementing the MNE Tax Law in Kuwait. By introducing an optional advance payment mechanism, the MoF has provided taxpayers with greater flexibility in managing their anticipated tax obligations.

The ability to submit a provisional tax statement and settle an estimated tax liability in advance may help reduce uncertainty, support smoother assessments, and facilitate earlier engagement between taxpayers and the tax authorities. MNE Groups should carefully consider whether participation in the advance payment system aligns with their tax governance, compliance-readiness and cash-flow objectives.