Decree-Law No. 62 of 2026 has been issued, approving Kuwait's accession to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS-MLI), as part of the state's efforts to enhance tax transparency, combat harmful tax practices, and ensure international fiscal fairness.

The official gazette, "Kuwait Al-Youm," published today Decree-Law No. 62 of 2026, formalizing Kuwait's accession to the Multilateral Convention (BEPS-MLI). This accession aligns with Kuwait's firm commitment to international standards established by the Organization for Economic Cooperation and Development (OECD), reflecting the state's ongoing efforts to modernize its legislative and financial frameworks to keep pace with rapid global economic developments.

​The primary objective of this convention is to close loopholes in international tax rules that previously allowed multinational corporations to artificially shift profits from jurisdictions where they perform substantive economic activity to other jurisdictions characterized as tax havens with low or zero tax burdens. This practice historically led to an unfair reduction in national tax revenues, necessitating a robust legislative response to safeguard the state's financial interests.

​The explanatory memorandum accompanying the decree highlights several core pillars and economic imperatives for this decision:

​Combatting Harmful Tax Planning: The decision recognizes that the government loses a substantial portion of corporate tax revenue due to international tax planning practices that result in the artificial shifting of profits, necessitating immediate legislative intervention to protect the state's financial resources.

​Responding to Global Economic Challenges: The Kuwaiti legislator recognizes that base erosion and profit shifting (BEPS) represent an urgent challenge that affects not only industrialized nations but also emerging and developing economies. This reality mandates unified international efforts to curb such practices and ensure a level playing field.

​Aligning Taxation with Real Economic Activity: The decree emphasizes the critical importance of ensuring that profits are taxed in the jurisdiction where substantive economic activities are performed, where value is generated, and where the economic reality of the business is established.

​Kuwait's accession to the BEPS-MLI convention marks a qualitative leap toward modernizing the national tax system. It enhances the attractiveness of the business environment by establishing firm principles of tax justice. This strategic move significantly curbs practices that deplete state financial resources, thereby supporting national fiscal sustainability in accordance with global best practices. Ultimately, it positions Kuwait among nations committed to international transparency, fostering increased confidence from financial institutions and global investors in the Kuwaiti economy.