KFAS Levy in Kuwait (2026 Legal Guide) — Rules & Requirements
About this article
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.
About Tax Rights in Kuwait
You pay no personal income tax in Kuwait, and Kuwait has not implemented VAT. The only direct tax is 15% corporate income tax on foreign companies' Kuwait-source profits under Decree Law No. 3 of 1955. Kuwaiti and GCC companies are exempt but pay three smaller levies: 1% KFAS, 2.5% NLST under Law No. 19 of 2000, and 1% corporate zakat under Law No. 46 of 2006. Social security via KGOSI is mandatory for Kuwaiti nationals only; expats get end-of-service indemnity instead. Companies can object to assessments within 60 days and appeal to the Tax Appeals Committee.
Common Questions
What is the kfas levy right in Kuwait?
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...
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.