Under Article 3 of Kuwait Income Tax Decree No. 3 of 1955, as amended by Law No. 2 of 2008, taxable income is determined after deducting all expenses and costs incurred to realise that income. Specifically, the article permits the deduction of several key expenditures. These include salaries, wages, end-of-service indemnities, and similar allowances for employees. Also deductible are taxes and fees, excluding the income tax payable under this law. The article allows for asset depreciation, donations to licensed Kuwaiti authorities, and head office overhead, with percentages and limits for these specified by the Executive Regulations.
Article 3
The taxable income will be determined after deducting all expenses and costs already spent to realize this income, particularly:
Salaries, wages, end-of-service indemnity and similar allowances.
Taxes and fees other than income tax payable in accordance with this law.
Asset depreciation in accordance with percentages already fixed under the Executive Regulations.
Donations, gifts and grants payable to public or private licensed Kuwaiti authorities within the limits already fixed under the Executive Regulations.
Head office overhead in accordance with the percentages already fixed under the Executive Regulations.
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