Global Daily Tax News, Austria, Kuwait Sign Double Tax Protocol, (Jun 26, 2025)

Austria and Kuwait have signed a Protocol amending their double tax agreement.

The agreement, signed on June 17, 2025, newly introduces taxing rights for the two territories to tax dividends income at source at a maximum tax rate of 10 percent. The treaty currently provides for a withholding tax exemption at source.

In addition, double tax will newly be avoided through the credit method, rather than the exemption method.

The agreement includes updated provisions on the exchange of information, on the application of minimum top-up taxes under the OECD's Pillar Two framework, and provisions to counter tax base erosion and profit shifting (BEPS).

Specifically, the Protocol will incorporate into the two countries' double tax agreement the BEPS minimum standard provisions, intended to counter treaty abuse, prevent the artificial avoidance of permanent establishment status, neutralize the effects of hybrid mismatch arrangements, and improve dispute resolution mechanisms.

Further, the agreement will feature a new preamble that states that the DTA is not intended to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance, or treaty shopping.