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June 26, 2026

This Memorandum of Understanding establishes a limited, reciprocal tax exemption for income derived from the international operation of aircraft. Citing US IRC sections 872(b) and 883(a), the agreement confirms the US exempts gross income earned by Kuwaiti resident individuals and corporations from such operations. Kuwait provides an equivalent exemption to US residents and corporations. Article 2 defines the scope of this income to include earnings from aircraft rental, the carriage of passengers or cargo, active participation in pools or joint ventures, and gains from the sale of aircraft used in international transport.

Memorandum of Understanding between THE Government of the UNITED STATES OF AMERICA and The Government of the State of KUWAIT for The Reciprocal Tax Exemption on Income Derived from The Operation of Aircraft

The Government or the State of Kuwait and the Government of the United States of America (hereinafter referred to as the 'Contracting Parties');

Desiring to strengthen the cooperation between them in the field of civil aviation towards mutual coordination between them in respect of the income derived from the international operation of aircraft between the State of Kuwait and the United States of America;

Have agreed as follows:

Contents

Article 1 - Taxes Covered

Article 2 - Definitions

Article 3 - Entry into Force

Article 4 - Termination

Article 1Taxes Covered

Article 1
Taxes Covered