_KENYA

Double Taxation Agreements (DTAs) & Protocols

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Chapter 2

Exemptions Limitations

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Kenya has a fairly extensive DTA network.

In terms of section 41 of Kenya's domestic tax legislation, an exemption, exclusion or reduction in the rate of Kenyan tax under a DTA is not available to a person, who, for the purposes of a DTA, is

» a resident in the other contracting state unless:

» more than 50% of the underlying ownership of that person is held by an individual or

» individuals who are residents of that other contracting state; or

» the resident of the other contracting state is a company listed on a stock exchange in that other contracting state.

» It is clear that section 41 limits any potential relief in terms of Kenya's DTA's unless one of the two requirements above is met.

Taxpayers investing in Kenya should therefore not automatically assume that they will qualify for DTA relief, including reduction of the withholding tax rates for the various types of payments.

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