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.