Countries With Double Taxation Agreements With Kenya

Reduced withholding tax rates apply only if the recipient of the income is the beneficial owner of the income. Expenses, including management costs of executives and management overheads incurred by the MOU inside or outside the State in which it is located, are deductible in the calculation of the EP`s taxable profit. All other qualified payments are deducted from a withholding tax at the standard withholding tax rate In order to tackle the problem of taxing the same income twice, countries conclude a double taxation convention (DTA). The DBA applies to all persons residing in Kenya, Mauritius or both countries and applies to all income taxes or taxes that are substantially similar to those of income tax. The DBA remains in force for an indefinite period, but any State Party may terminate it by letter to the other State no later than 30 cancel the month of June of a calendar year beginning five years after the entry into force of the DCM. In addition, Kenya has signed DTAs with the Islamic Republic of Iran, Canada, all EAC member countries, Germany, Denmark, France, Kuwait. Kenya has only eleven bilateral tax treaties allowing for direct tax compensation (and double taxation exemption). The DBA covers direct taxes that are administered under the Income Tax Act, cap 470 of the laws of Kenya. It includes corporation tax, withholding tax, pay as You Earn (PAYE) and capital gains tax (CGT). Mauritius does not have a CGT scheme, so the DBA only covers income tax, including corporate social responsibility. The agreements define a particular country that taxes the different types of income. Under Mauritian domestic laws, no withholding tax applies to interest paid to a non-resident who is not engaged in business in Mauritius (a) by a company holding a Global Business Licence (GBL) on its foreign income, in accordance with the Financial Services Act (ASL); (b) by a bank holding a banking licence under the Banking Act, provided that interest on the gross income from its banking operations is paid with non-residents and limited ies holding a GBL according to the ASL.

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