KUWAIT: The Ministry of Finance proposed Apple to enter Kuwait through Kuwait Direct Investment Public Authority (KDIPA) to ensure its listing on the roster of foreign companies that are exempt from paying taxes under double taxation treaties, according to sources. The US technology giant had postponed entering Kuwait through its Apple Pay service, adding that the ministry held several meetings with company representatives to explain its tax situation in case it signed up with local banks to apply the Apply Pay service.

The company first asked the finance ministry to exempt it from the rule that stipulates a 5 percent deduction from the total returns of Apple Pay in Kuwait, Al-Rai Arabic daily reported yesterday, quoting the sources. Apple argued it should not be considered an investment that must pay taxes, as the company presented a description of its financial payment service done through apps and not through its presence in Kuwait, which exempts it from any local taxes.

It seems finance ministry officials were not convinced, said the sources who spoke on the condition of anonymity. “They believe that activating the Apple Pay service locally will constitute moving of money outside Kuwait to a foreign company, as Apple will collect a percentage of each transaction from banks that use its payment services, be they Kuwaiti or others,” the explained.

“They insist Apple must pay taxes as the law stipulates, which is at five percent in this regard.” Ministry officials also believe that even if the company doesn’t have premises in Kuwait, this will not exempt it from paying taxes as long as it benefits from the country’s markets, the sources noted.