The Double Taxation Relief (Taxes on Income) (Kuwait) Order 1999

ARTICLE 24 Elimination of double taxation

(1) Subject to the provisions of the law of the United Kingdom regarding the allowance as a credit against United Kingdom tax of tax payable in a territory outside the United Kingdom (which shall not affect the general principle hereof):

(a) Kuwaiti tax payable under the laws of Kuwait and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable gains from sources within Kuwait (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any United Kingdom tax computed by reference to the same profits, income or chargeable gains by reference to which the Kuwaiti tax is computed;

(b) in the case of a dividend paid by a company which is a resident of Kuwait to a company which is a resident of the United Kingdom and which controls directly or indirectly at least 10 per cent. of the voting power in the company paying the dividend, the credit shall take into account (in addition to any Kuwaiti tax for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the Kuwaiti tax payable by the company in respect of the profits out of which such dividend is paid.

• For the purposes of this paragraph, the term “Kuwaiti tax” shall not include:

  (a)

  the contribution from the net profits of Kuwaiti shareholding companies payable to the Kuwaiti Foundation for Advancement of Science (KFAS);

  (b)

  the Zakat.

(2) In the case of Kuwait:

• Where a resident of Kuwait derives income or owns capital which, in accordance with the provisions of this Agreement, may be taxed in both the United Kingdom and Kuwait, Kuwait shall allow as a deduction from the tax on the income or on the capital of that resident, an amount equal to the tax paid on the income or on the capital in the United Kingdom.

• Such deduction in either case shall not, however, exceed that part of the tax on the income or on the capital, as computed before the deduction is given, which is attributable, as the case may be, to the income or to the capital which may be taxed in the United Kingdom.

(3) For the purposes of paragraphs (1) and (2) of this Article, profits, income and capital gains owned by a resident of a Contracting State which may be taxed in the other Contracting State in accordance with this Agreement shall be deemed to arise from sources in that other Contracting State.