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  • A site by BDO Kenya
  • Double taxation and treaties

Treaty countries

Kenya has double tax avoidance treaties with the following countries:

 

1) Canada

2) Denmark

3) France

4) Germany

5) India

6) Iran

7) Mauritius (Possibly with effect from 1 January 2017).

8) Norway

9) Sweden

I0) United Kingdom

11) Zambia

12) South Africa

 

Some of these treaties provide for preferential withholding tax rates. In most cases however, the standard tax rates set out above apply. The treaties will in most cases allow for the set-off of withholding tax against tax liability in the respective countries. Treaties with East African partner states, Kuwait, Iran, Mauritius and UAE have been concluded but not ratified.

 

Preferential treaty withholding tax rate

All other qualifying payments will attract withholding tax at the standard withholding tax rates

 

 

 

UK

Germany

Canada

India

France

Management & professional fees

12.5%

15%

15%

17.5%

 

Royalties

15%

15%

15%

 

10%

Interest

 

 

 

 

12%

Withholding tax paid abroad

Withholding tax paid abroad may be claimed against Kenya income tax only if there is a unilateral or bilateral provision for relief.  Kenya has only eleven bi-lateral tax treaties that allow for direct tax offsets (and relief from double taxation).

 

Where direct tax set-offs are not possible, withholding tax paid abroad (where the income is taxable in Kenya) is deductible as an expense. Unilateral relief of foreign tax in Kenya setting is extended to Kenyan nationals in respect of employment, sports and entertainment income required to be reported and taxed in Kenya.