Shafaq News/ Kuwait has issued a decree approving a bilateral tax treaty with Iraq to prevent double taxation and combat financial evasion related to taxes on income and capital.

The explanatory memorandum accompanying the decree, as reported by Saudi news agency Argaam, said the treaty ultimately aims to strengthen economic ties between the two countries. The agreement seeks to eliminate instances of double taxation and curb tax evasion.

Article 1 of the treaty stipulates its applicability to individuals residing in either or both contracting states. Article 2 outlines the specific taxes covered under the agreement.

The treaty defines dividend income as earnings from shares, founders' shares, or other equity-based rights, including profits from other corporate rights, such as income from shares, as per the laws of the contracting state where the company distributing the income is domiciled.

The agreement also mandates the exchange of confidential information between the relevant authorities of both countries to ensure the effective implementation of the treaty's provisions.

The deal, according to the memorandum, excludes income earned by residents of a contracting state in their capacity as theatrical or film artists, radio or television broadcasters, musicians, or athletes, allowing such categories to be taxed in the contracting state.