Kuwait agrees to multilateral agreement on tax report exchange among countries
Kuwait has agreed to a multilateral agreement to enhance tax transparency and automatically exchange information with other countries to curb base erosion and profit shifting.
Translated by Qiyas from الراي — Original source
Kuwait has approved the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports, with the aim of enhancing international tax transparency and developing the automatic exchange of information between tax authorities, thereby contributing to the assessment of transfer pricing risks and the mitigation of base erosion and profit shifting.
Decree-Law No. 116 of 2026, published in the official gazette “Kuwait Al-Yaum,” stipulates approval of the agreement signed in Paris on June 22, 2026, to take effect from the date of its publication in the official gazette.
The agreement aims to enable tax authorities to access information related to the global allocation of income of multinational enterprise groups and taxes paid, along with indicators regarding the locations of their economic activities across various jurisdictions in which they operate, thereby supporting tax risk analysis and improving the efficiency of oversight.
The agreement regulates the mechanism for the annual automatic exchange of reports between competent authorities in countries where the agreement applies, under specific controls that include the scope of exchanged information, submission deadlines, and electronic transmission methods using standardized encryption criteria.
The agreement sets a deadline of no more than 18 months from the end of the relevant financial year for the initial exchange of reports, while the deadline for subsequent exchanges shall not exceed 15 months from the end of the financial year of the relevant multinational enterprise group.
The agreement emphasizes that all exchanged information is subject to confidentiality and protection rules, and its use is restricted to authorized purposes, primarily the assessment of transfer pricing risks and base erosion and profit shifting, as well as economic and statistical analyses when appropriate.
It also affirms that the exchanged reports do not, by themselves, constitute conclusive evidence of the appropriateness or inappropriateness of transfer prices, nor may they be relied upon solely to make adjustments to transfer pricing, although they may be used as a basis for further inquiries during tax audits and examinations.
The agreement includes mechanisms for addressing errors and non-compliance, consultations between competent authorities to resolve difficulties and undesirable economic outcomes, and the possibility of temporarily suspending the exchange of information in cases of serious non-compliance, in accordance with specified conditions and procedures.
