KFAS Levy in Kuwait
Reviewed by the Commoner Law Editorial Team. Sourced from Kuwaiti national legislation, Amiri decrees, and ministerial decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
What is this right?
The Kuwait Foundation for the Advancement of Sciences (KFAS) is funded by a unique levy on Kuwaiti company profits — a mechanism that effectively channels private sector wealth into scientific research and education:
- The KFAS levy is 1% of net profits for Kuwaiti shareholding companies — established by Amiri Decree in 1976.
- This funds scientific research, education, technology development, and innovation grants across Kuwait.
- The levy applies to Kuwaiti public and closed shareholding companies (K.S.C. and K.S.C.C.).
- It does not apply to foreign companies (they pay the 15% corporate income tax instead) or to sole proprietorships.
- KFAS is one of the largest research funding bodies in the Arab world — the levy is a significant reason why.
When does it apply?
- You own or manage a Kuwaiti shareholding company that earns a profit.
- Your company is preparing its annual financial statements and needs to calculate all mandatory levies.
What to Do If Your Kuwaiti Company Owes the KFAS Levy
- Calculate 1% of net profits and include it in your financial planning alongside NLST and corporate zakat.
- Pay the levy on time as part of your annual financial closing — KFAS collects directly.
- Consult with your auditor to confirm the correct calculation method — KFAS has specific rules on what adjustments are allowed before computing the 1%.
What should you NOT do?
- Do not ignore the KFAS obligation — it is mandatory for all covered companies and KFAS enforces collection.
- Do not underreport profits to reduce the levy — this can trigger audits from both KFAS and the Ministry of Commerce.
- Do not confuse KFAS with corporate tax or zakat — they are three separate obligations calculated independently on profits.
Common Questions
When does it apply — kfas levy?
You own or manage a Kuwaiti shareholding company that earns a profit.Your company is preparing its annual financial statements and needs to calculate all mandatory levies.
What should I do to ensure my Kuwait shareholding company correctly pays the KFAS levy?
Calculate 1% of net profits and include it in your financial planning alongside NLST and corporate zakat.Pay the levy on time as part of your annual financial closing — KFAS collects directly.Consult with your auditor to confirm the correct calculation method — KFAS has specific rules on what adjustments are allowed before computing the 1%.
What should you NOT do — kfas levy?
Do not ignore the KFAS obligation — it is mandatory for all covered companies and KFAS enforces collection.Do not underreport profits to reduce the levy — this can trigger audits from both KFAS and the Ministry of Commerce.Do not confuse KFAS with corporate tax or zakat — they are three separate obligations calculated independently on profits.