Emerging Markets Rates and Currencies Handbook

Tax Summary – Kuwait Kuwait Country Tax Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities W/H Tax • No WHT* • WHT for other countries with which there are certain tax treaties • N/A • No WHT* • WHT for other countries with which there are certain tax treaties • Dividends from locally listed companies exempt from local taxes Deductibility of interests • No deductibility • No transfer pricing law, however, Tax Authority can inspect transactions to ensure they on an arm’s length basis • Deductible if related to operations in Kuwait and paid to local bank • N/A • N/A Deductibility of (FX) Losses • Only realized losses are deductible** • N/A • Only realized losses are deductible** Other Taxes/Duties • VAT framework currently under discussion • N/A • VAT framework currently under discussion * Kuwait does not impose 5% WHT on services / products provided in Kuwait across all invoices. However, all public bodies and private entities are required to retain 5% from the contract, agreement, or transaction value or from each payment made to any incorporated body until presentation of a tax clearance certificate, by the recipient of such payment from the Ministry of Finance (MoF), confirming that the respective company has settled all of its tax liabilities in Kuwait. Source: https://taxsummaries.pwc.com/quick-charts/withholding-tax-wht-rates ** Local Citi experience and related tax advice is to not deduct unrealized losses from tax filing. Experience with other banks has been that all such deductions were later disallowed during inspections and resulted in extra tax (with penalty interest) to be paid. Source: EY and local Citi tax counsel. Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available source