Qatar ratifies double taxation agreement with Kuwait

In detail

Qatar ratifies double taxation agreement with Kuwait

Qatar has issued Emiri Decree No. (1) of 2026 ratifying the double taxation agreement between the State of Qatar and the State of Kuwait. Kuwait had previously ratified the treaty through Decree-Law No. 142 of 2025.

The agreement will enter into force once the two countries exchange instruments of ratification through diplomatic channels. The provisions of the treaty will thereafter apply in accordance with the timelines specified in the agreement.

The ratification forms part of a broader regional trend towards expanding bilateral tax treaty networks aimed at facilitating cross-border investment, enhancing tax certainty and mitigating the risk of double taxation on income arising between jurisdictions.

Key treaty provisions

The Qatar–Kuwait treaty adopts a mixed approach, whereby certain types of income are taxable only in the state of residence, while others may be taxed in the source state subject to a capped rate.

Dividends: Dividends paid by a company resident in one state to a resident of the other state are taxable only in the state of residence of the recipient, with no withholding tax in the source state.

Interest: Interest arising in one state and beneficially owned by a resident of the other state is taxable only in the state of residence of the recipient, with no withholding tax in the source state.

Royalties: Royalties arising in one state and paid to a resident of the other state may be taxed in the source state; however, the tax so charged shall not exceed 8% of the gross amount of the royalties.

Capital gains:

Gains derived from the disposal of immovable property may be taxed in the state where the property is located. Gains from the disposal of movable property forming part of a permanent establishment may be taxed in the state where the permanent establishment is situated. Gains from ships and aircraft operated in international traffic are taxable only in the state of effective management. Other gains are generally taxable only in the seller’s state of residence.

Key takeaways and PwC’s observations​

The ratification of the Qatar - Kuwait double taxation agreement is a positive development in line with Qatar’s broader strategy to expand its treaty network and enhance tax certainty for cross-border investments. From a technical perspective, the treaty provides favorable outcomes in respect of passive income including dividends, interest and capital gains (except for immovable property).

It is important that, businesses with investments, in the process of investing or that are planning to invest in the (near) future from Qatar into Kuwait or vice versa should review their operating structures in light of the signed double tax treaties, assess the impact on their (intended) activities and determine how they can make best use of the tax benefits provided by these treaties.