Ministerial Decision No. 55 of 2025 establishes Kuwait's DMTT framework under Decree-Law No. 157 of 2024. Article 71 specifies the legal criteria for determining comparability in transactions between related persons, a fundamental aspect of transfer pricing compliance for MNE Groups. It mandates a comprehensive analysis based on six key factors: contractual terms, transaction characteristics, economic circumstances, the functional profile (activities, assets, risks), business strategies, and any other conditions set by the Tax Administration. This ensures adherence to the arm's length principle, aligning with OECD transfer pricing guidelines.
CHAPTER 10 - TRANSFER PRICING FOR RELATED PERSONS
Article 71 - Comparable Transactions
To determine whether transactions between related Persons are comparable to transactions between unrelated Persons under similar conditions, the following factors must be considered:
Contractual terms of the transactions.
Characteristics of the transactions.
Economic circumstances under which the transactions occur.
Economic activities, assets used, and risks assumed in entering the transaction.
Business strategies related to the transactions.
Any other factors specified by the Tax Administration.
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