Income tax act kenya pdf

So you are excused for finding it a bit on the confusing side than helpful. The rate of cit for resident companies, including subsidiary companies of foreign parent companies, is 30%. Income tax act 90 of 1988 income tax amendment act. 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. Amendments to the income tax act, cap 470 of the laws of kenya 1.

The trustee act, chapter 167 of the laws of kenya 1929 the value added tax act act no. An act of parliament to make provision for the charge, assessment and collection of income tax. The tax laws amendment bill, 2020 was published on 30 march 2020. 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. To this effect, the bill proposes to repeal the 20 percent withholding tax provisions on demurrage charges introduced by the finance act 2018. An act to consolidate and amend the law relating to income tax and for other connected purposes. 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. In this act, unless the context otherwise requires. Resident companies with business activities outside kenya are also taxed on income derived from business activities outside of kenya. Throughout the years, amendments to the ita have been made, mainly. The income tax act, value added tax, excise duty act, tax procedures act and miscellaneous fees and levies act.

These rules may be cited as the income tax transfer pricing rules, and shall come into operation on the 1st. In kenya, determination of tax residency is guided by the income tax cap 470. The president of kenya assented to an act of parliament, the finance act, 2019 the act on 7 november 2019. We highlight below some of the key changes introduced by the finance act, 2019. 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. Tax residency means the country where a taxpayer has chosen to be the main taxpaying point. 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. 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. Agreement between south africa and kenya for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income files. However, some procedures were left in the specific tax acts. Landlords are expected to prepare a rent schedule for the leased property evidencing.

Nonresident companies are subject to kenya corporate income tax cit only on the trading profits attributable to a kenyan permanent establishment pe. Interest paid by the government and the central bank of kenya is tax exempt. Part iii income tax base division i calculating the income tax base subdivision a total income 5. Mar, 2019 tax procedures act, 2015 tpa was assented to on 15th december 2015 and commenced operations on 19th january 2016. 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. Deloitte kenya tax alert tax laws amendment bill 2020. Income from management or professional fees, royalties, interest and. The income tax act is amended by repealing section 51a. The tax laws amendment act, 2018 has introduced minimal provisions and amendments to the income tax act ita and the stamp duty act. 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. Kenya subsidiary legislation, 2016 2875 legal notice no.

Theincome tax act on total income, including taxes on gains. Income from dividends 28 7a dividend tax account 29 8. Exempt income under 1st schedule of income tax act ita. In kenya, the statutory income tax rate for tax residents is thirty per cent 30%. The international center for notforprofit laws digital legal library holds nearly 4,000 resources from over 200 countries and territories. 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. The income tax act is amended by repealing section 75a.

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. The africa tax guide 201819 is an annual publication that provides an overview of the taxation and business. Procedures in all tax acts in kenya were consolidated into this one act. The bill has proposed amendments to the income tax act, value added tax act, 20. All companies in receipt of income exempt from tax. The income tax act hereinafter referred to as the principal act is amended in section 2 cap. 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. The finance act, 2018 amended the income tax act by repealing section 7a and. An act of parliament to make amendments to tax related laws enacted by the parliament of kenya, as follows 1. Income tax is governed by the income tax act, cap 470 laws of kenya. This act may be cited as the income tax act, 2004, and shall come into operation on the 1st july, 2004. This is because section 32ai of the income tax act already provides for the taxation of income from business, the definition of which includes. Tax residency is a basis for levying income tax in kenya.

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. This booklet is a guide on the taxation regime in kenya. It replaced the east africa income tax management act. 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. Scribd is the worlds largest social reading and publishing site. Post continues after photo photo by waka this is an act of parliament. Interest paid by the government and the central bank of kenya is taxexempt. Interpretation 10 part ii imposition of income tax 22 3. The income tax guide availed by kra is a technical, 57page document, written in court lingo. 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. Mini auction for reoffers scheduled to take place on 29th january 2020 at customs warehouse kilindini.

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. This act shall apply to mainland tanzania as well as tanzania zanzibar. Fortunately for you, there is a fitting free online paye income tax calculator you could use to help you with pinning the numbers where. The cit rate for branches of foreign companies and pes is 37. Chapter 470 income tax act arrangement of sections part i preliminary section 1. Income from management or professional fees, royalties, interest and rents 35 11. 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. Income of certain non resident persons deemed derived from kenya 35 10.

Kenya kra paye calculator 2020 income tax, nssf, nhif. The income tax act is amended in section 37 aby deleting subsection 6. 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. The searchable database contains laws, reports, and other civil society legal resources from countries around the world. 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. 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. Kenya finance act 2019 insights deloitte united states. This act applies to years of income commencing on or after 1st july, 1997. The income tax act is amended by repealing section 98. Delete the definition of qualifying interest and substitute therefor the following new definition. 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 act proposes key amendments to various tax legislation in kenya including. In kenya, rental income currently is taxable under section 32aiii of the income tax act ita, cap 470 laws of kenya. Taxation is the key source of revenue that the government of kenya uses to provide. The income tax act is amended by repealing section 72. In this act, unless the context requires otherwise adjusted assessment means an assessment adjusted in.