Kenya double tax treaties

The Treaty & International Policy office is tasked with managing international tax matters that include Double Taxation Agreements (DTAs), Mutual Agreement Procedures (MAP), Legislative Review and Implementation of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Agenda recommendations domestically.

The responsibilities of the T&IP office are categorized into the following key functional areas:

Double Taxation Agreement (DTA) Management

• A Double Taxation Agreement (DTA) is a treaty between two or more countries to avoid double taxation of income and to enhance economic cooperation.
• This function of the office involves carrying out an in depth analysis of the DTA network and domestic tax systems of countries with which Kenya intends to negotiate and sign DTAs. The team prepares a report on this and shares it with the National Treasury to be used during the preparation phase and actual negotiation of the DTA.
• The office also provides interpretation of tax treaties which are in force between Kenya and other countries to ensure that they are properly applied and implemented. This interpretation is done upon request from taxpayers seeking to understand how treaties apply to their transactions.

Legislative Review

• This involves providing comprehensive policy analysis and advice to the National Treasury on all matters of taxation of cross border transactions.
• It involves identifying gaps in the international tax legal framework and designing and recommending amendments to legislation on all issues of cross border taxation.
• The proposals made are mainly in line with the policies being adopted internationally in order to minimize cases of base erosion and profit shifting in order to preserve the country’s tax base.

Participation in International Taxation meetings

• The meetings are held to develop international tax laws and policies intended to seal loopholes in domestic tax systems and to ensure that taxes are paid in the jurisdictions where value is created.
• The main bodies that organize these meetings are the OECD (Organisation for Economic Cooperation and Development), the UN (United Nations), ATAF (African Tax Administration Forum) and EARATC (East African Revenue Authority Technical Committee).
• This engagement is beneficial because it ensures that developing country perspectives are incorporated in the development of international tax policies.

Mutual Agreement Procedure (MAP) - Dispute Resolution

• A Mutual Agreement Procedure (MAP) is a process through which taxpayers approach the Competent Authorities of the parties to the DTA in order for them to address cases of double taxation or taxation not in accordance with the DTA.
• A Kenyan resident taxpayer can initiate a MAP with the Kenyan Competent Authority if he establishes that an action of KRA or one of Kenya’s tax treaty partners, or both, will result in taxation not in accordance with a tax treaty in force between the two jurisdictions.
• The MAP request must be filed within 3 years from the date of notification of the act.
• Where the Kenyan Competent Authority can resolve the taxation not in accordance with the DTA unilaterally, then the MAP case is closed at this stage.
• Where the taxation not in accordance with the DTA cannot be resolved unilaterally, the two Competent Authorities will enter into discussions and endeavour to resolve the issue.

Tax Residence Certificates (TRCs)

• These are certificates issued to taxpayers to prove their tax residency in Kenya and that taxes are paid herein. The certificate is generally used to avoid double taxation in the other country where they may be conducting business and with which there is a DTA with Kenya in force.
• Tax residence is determined by Section 2(1) of the Income Tax Act.
• The standard documentation required in the processing of a TRC application.

Application for Individuals

1. Full name and address of the applicant.
2. D. Number and KRA PIN.
3. Alien I.D and work permit, where applicable.
4. The reason and period for which a certificate is required.
5. The type and amount of foreign income received during the period for which a certificate is required.
6. The Article of the DTA under which the request regarding this income is being made (attach form from the other country where applicable).
7. If the individual is not in receipt of foreign income, details of the circumstances under which a certificate is required.
8. Proof of a permanent home in Kenya (for example, utility bills in the applicant’s name, lease agreements, etc)
9. If no permanent home, proof of presence in Kenya for 183 days or 122 days as required by Section 2 of the Income Tax Act.

Application for Companies

1. Name and address of the applicant.
2. Copy of Certificate of incorporation of the applicant.
3. The reason and period for which a certificate is required.
4. The type and amount of foreign income received during the period for which a certificate is required.
5. The Article of the DTA under which the request regarding this income is being made (attach form from the other country where applicable).
6. If the company is not in receipt of foreign income, details of the circumstances under which a certificate is required.

Application for Partnerships

1. Name and address of the applicant.
2. Business Registration details of the applicant.
3. A signed list detailing the individual partners’ names, separately identifying those that are residents of Kenya and those that are not, confirming whether each of the partners are Kenyan resident as at the date of the application (with supporting documents).
4. The reason and period for which a certificate is required.
5. The type and amount of foreign income received during the period for which a certificate is required.
6. The Article of the DTA under which the request regarding this income is being made (attach form from the other country where applicable).
7. If the partnership is not in receipt of foreign income, details of the circumstances under which a certificate is required.

Submission of the Application

All applicants are required to draft an application letter stating whether the application is by an Individual, Company or Partnership, together with the requirements specified above and address it to:

Domestic Taxes Department,

Kenya Revenue Authority,

Times Tower, 19th Floor,

P.O Box 48240-oo1oo

Once all the required documents and information are received from the applicant, the application process takes 15 working days for processing, review and signature.

Contact Details for the Treaties & International Policy Office

• Name: Wanjiru Kiarie Governmental Agency: Kenya Revenue Authority Department/Division: Domestic Taxes Department - Large Taxpayers Office Function/ Role: Manager, Competent Authority Office & Authorized Contact Person Email:KenyaCompetentAuthority@kra.go.ke & wanjiru.kiarie@kra.go.keTelephone: +254 709 01 7985 Language skills: English Notes: Responsible for all treaty and International Policy matters including BEPS, MAP, Tax Residence Certificate Issuance and DTA negotiation and interpretation. Name: Grace Wairimu Kariuki Governmental Agency: Kenya Revenue Authority Department/Division: Domestic Taxes Department - Large Taxpayers Office Function/Role: Supervisor, Competent Authority Office & Authorized Contact Person Email:KenyCompetentAuthority@kra.go.keTelephone: +254 709 01 7945 Language skills: English Notes: Responsible for all treaty and International Policy matters including BEPS, MAP, Tax Residence Certificate Issuance and DTA negotiation and interpretation Name: Doreen Dorika Governmental Agency: Kenya Revenue Authority Department/Division: Domestic Taxes Department – Large Taxpayers Office Function/Role: Supervisor, Competent Authority Office & Authorized Contact Person Email:KenyaCompetentAuthority@kra.go.keTelephone: +254 709 01 1890 Language skills: English Notes: Responsible for all treaty and International Policy matters including BEPS, MAP, Tax Residence Certificate Issuance and DTA negotiation and interpretation
• Name: Elizabeth Githinji Governmental Agency: Kenya Revenue Authority Department/Division: Domestic Taxes Department – Large Taxpayers Office Function/Role: Supervisor, Competent Authority Office & Authorized Contact Person Email:KenyaCompetentAuthority@kra.go.keTelephone: +254 709 01 7933 Language skills: English Notes: Responsible for all treaty and International Policy matters including BEPS, MAP, Tax Residence Certificate Issuance and DTA negotiation and interpretation