Such income shall be deemed income derived from kenya and the agents of the nonresidents will be responsible for accounting for tax on such income at the nonresident corporate tax rate of 37. Income of certain non resident persons deemed derived from kenya 35 10. The income tax guide availed by kra is a technical, 57page document, written in court lingo. Mar, 2019 tax procedures act, 2015 tpa was assented to on 15th december 2015 and commenced operations on 19th january 2016. Income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website. Interest paid by the government and the central bank of kenya is taxexempt. The income tax act is amended by repealing section 75a. In kenya, the statutory income tax rate for tax residents is thirty per cent 30%. In kenya, determination of tax residency is guided by the income tax cap 470. An act of parliament to make provision for the charge, assessment and collection of income tax.
Pwc kenya 2 income tax bill 2018 introduction the national treasury of the republic of kenya released the draft income tax bill, 2018 itb for comments by stakeholders. The finance act, 2018 amended the income tax act by repealing section 7a and. Chapter 470 income tax act arrangement of sections part i preliminary section 1. The trustee act, chapter 167 of the laws of kenya 1929 the value added tax act act no. Taxation is the key source of revenue that the government of kenya uses to provide. Kenya finance act 2019 insights deloitte united states. South african institute of chartered accountants integritax newsletter income tax and vat acts online the income tax act, 1962, valueadded tax act, 1991 and other tax acts may be accessed on the sars website the consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. The bill has proposed amendments to the income tax act, value added tax act, 20. Income from dividends 28 7a dividend tax account 29 8. Interest paid by the government and the central bank of kenya is tax exempt. The income tax act is amended in section 37 aby deleting subsection 6.
Kenya kra paye calculator 2020 income tax, nssf, nhif. This act applies to years of income commencing on or after 1st july, 1997. Tax procedures act, 2015 tpa was assented to on 15th december 2015 and commenced operations on 19th january 2016. These rules may be cited as the income tax transfer pricing rules, and shall come into operation on the 1st. Kenya subsidiary legislation, 2016 2875 legal notice no. Income tax act 90 of 1988 income tax amendment act. This act may be cited as the income tax amendment act 2014, and commences on the pt day of july 2014. Theincome tax act on total income, including taxes on gains. It replaced the east africa income tax management act. The africa tax guide 201819 is an annual publication that provides an overview of the taxation and business. Landlords are expected to prepare a rent schedule for the leased property evidencing. The rate of cit for resident companies, including subsidiary companies of foreign parent companies, is 30%.
The income tax act is amended by repealing section 72. Ministries, exempt ngos income of county governments income of a registered pension and provident schemefund interest on post office savings accounts interest income from all listed bonds 3year maturity or more. Throughout the years, amendments to the ita have been made, mainly. Nonresident companies are subject to kenya corporate income tax cit only on the trading profits attributable to a kenyan permanent establishment pe.
The act proposes key amendments to various tax legislation in kenya including. All air prevention and control of pollution act, 1981 apprentices act, 1961 arbitration and conciliation act, 1996 banking cash transaction tax black money undisclosed foreign income and assets and imposition of tax act, 2015 central boards of revenue act, 1963 charitable and religious trusts act, 1920 charitable endowments act, 1890. However, some procedures were left in the specific tax acts. Value added tax vat is charged under the value added tax act 20 on the supply of taxable goods and services and the importation of taxable goods and services into kenya. Mini auction for reoffers scheduled to take place on 29th january 2020 at customs warehouse kilindini. Exempt income under 1st schedule of income tax act ita. Part iii income tax base division i calculating the income tax base subdivision a total income 5.
Income from management or professional fees, royalties, interest and. An act of parliament to harmonise and consolidate the procedural rules for the administration of tax laws in kenya, and for connected proposes act no. The consolidated income tax act is available, in a pdf version, under the tax heading on the university of pretoria, laws of sa consolidated legislation website. The reintroduction of the capital gains tax regime in kenya is expected to widen the tax net and increase tax revenue collection for the government. Post continues after photo photo by waka this is an act of parliament. This act shall apply to mainland tanzania as well as tanzania zanzibar. This booklet is a guide on the taxation regime in kenya. The searchable database contains laws, reports, and other civil society legal resources from countries around the world. This act may be cited as the income tax act, 2004, and shall come into operation on the 1st july, 2004.
Kenya imposes new income tax on residential rentals. In this act, unless the context otherwise requires. Laws of kenya income tax act chapter 470 revised edition 2018 2012 published by the national council for law reporting with the authority of the attorneygeneral. The cit rate for branches of foreign companies and pes is 37. Amendments to the income tax act, cap 470 of the laws of kenya 1. Tax residency is a basis for levying income tax in kenya. In kenya, rental income currently is taxable under section 32aiii of the income tax act ita, cap 470 laws of kenya. Kenya revenue authority act, cap 469 may 1, 2020 tax changes in tax laws amendment act, 2020 in kenya april 30, 2020 tax appeals tribunal act, 20 april 28, 2020. The income tax act cap 470 in exercise of the powers conferred by section 188 of the income tax act, the minister for finance makes the following rules the income tax transfer pricing rules, 2006 1. Deloitte kenya tax alert tax laws amendment bill 2020. To this effect, the bill proposes to repeal the 20 percent withholding tax provisions on demurrage charges introduced by the finance act 2018.
The president of kenya assented to an act of parliament, the finance act, 2019 the act on 7 november 2019. The income tax act is amended by repealing section 51a. Income tax is governed by the income tax act, cap 470 laws of kenya. The final section of each country summary sets out the double tax treaty and nontreaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments. The tax laws amendment act, 2018 has introduced minimal provisions and amendments to the income tax act ita and the stamp duty act. An act to consolidate and amend the law relating to income tax and for other connected purposes. The income tax act, value added tax, excise duty act, tax procedures act and miscellaneous fees and levies act. The interest is capped at the value of the principal tax, while the withholding tax penalty is limited to shs 1 million currently, there is no clarity on how the 10% tax on residential rental income will be paid, where the. Resident companies with business activities outside kenya are also taxed on income derived from business activities outside of kenya. Income from management or professional fees, royalties, interest and rents 35 11. The tax laws amendment bill, 2018 was assented to by the president on 18 july 2018 and gazetted to an act of parliament on 25 july 2018. Tax residency means the country where a taxpayer has chosen to be the main taxpaying point.
Fortunately for you, there is a fitting free online paye income tax calculator you could use to help you with pinning the numbers where. We highlight below some of the key changes introduced by the finance act, 2019. In this act, unless the context requires otherwise adjusted assessment means an assessment adjusted in. The tax laws amendment bill, 2020 was published on 30 march 2020. Failure andor late paye payments will incur penalty at the rate of 25 per cent of amount paid late as per section 372 of the income tax act and interest at 1% per month per as per section 381 of the tax procedures act, 2015.
The income tax act hereinafter referred to as the principal act is amended in section 2 cap. So you are excused for finding it a bit on the confusing side than helpful. Kenya the key changes in kenya came about from the finance act, 2019 which was assented into law on 7 november 2019. Procedures in all tax acts in kenya were consolidated into this one act. An act of parliament to make amendments to tax related laws enacted by the parliament of kenya, as follows 1. Income tax act relevant section of the income tax act unless specifically provided the income tax act ita was enacted in 1973, and its effective date of commencement was 1974. The overhaul of the income tax act ita is a welcome move noting that the current ita was enacted in 1974 and has undergone a lot. The finance act 2014 amended the eighth schedule of the income tax act ita and as a consequence, cgt was reintroduced with effect from 1 january 2015. All companies in receipt of income exempt from tax. Scribd is the worlds largest social reading and publishing site. This is because section 32ai of the income tax act already provides for the taxation of income from business, the definition of which includes. Agreement between south africa and kenya for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income files. Having now been passed by both arms of the national assembly, and thereafter assented to by the president, it is expected that its.
Management and professional fees subject to normal wht rates. Interpretation 10 part ii imposition of income tax 22 3. Delete the definition of qualifying interest and substitute therefor the following new definition. The international center for notforprofit laws digital legal library holds nearly 4,000 resources from over 200 countries and territories. The income tax act is amended by repealing section 98. Mar 05, 2019 tax residency is a basis for levying income tax in kenya. An act to make provision for the charge, assessment and collection of income tax, for the ascertainment of the income to be charged and for matters incidental thereto.
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