Withholding tax
Royalties are subject to withholding tax at a rate of 5% and 20% when paid to resident and non-resident persons respectively on the gross royalty payment made.
Interest when paid to both resident and non-resident persons is liable to withholding tax at 15% on the gross interest paid, with the exception of interest from housing bonds to resident persons which is subject to withholding tax at the rate of 10% on the gross interest paid.
Dividends when paid to residents and citizens of the East African Community Partner States are subject to withholding tax at a rate of 5%, while a rate of 10% is applicable to dividends paid to non-residents (other rates as appropriate).
Where a double tax treaty exists, lower withholding tax rates for royalties, interest and dividends may apply.
With effect from January 2018 - Management or professional fees or training fee – paid by Special Economic Zone Enterprise, Developer or Operator to a non-resident persons shall be 5% of the gross amount payable.
With effect from January 2018 - Royalty paid by any Special Economic Zone Enterprise, Developer or Operator to a non-resident person shall be 5% of the gross amount payable.
With effect from January 2018 - Interest paid by any Special Economic Zone Enterprise, Developer or Operator to a nonresident persons, 5% of the gross amount payable.