Doing Business in Kenya - RSM International

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partnership in which the husband or the husband and wife jointly own directly orthrough a nominee 12.5% or more of the capital or the voting power.Every employer operating the PAYE system is required to file the following returns:• Monthly Payment PAYE Slip (P 11) - To be stamped by the bank on paymentof PAYE deductions. To be paid by the 9th of the following month or the lastworking day before the 9th where this falls on a Saturday, Sunday or a publicholiday.• PAYE Deduction Summary either to be completed monthly through the KRAOnline website or quarterly manually. The deadline is either the 9th of thefollowing month or quarter, as applicable.• Annual Tax Deduction Card (P 9) to be completed for each employee by the28th February of the following year and given to each employee as a proof ofdeduction of tax at source.4.3.6 Advance, Installment and Final Tax Paymentsand DeadlinesUnder the PAYE rules, all deductions made by an employer (including fringe benefittax payable by the employer) must be paid on or before the 9th day of the followingmonth or the last working day before the 9th where this falls on a Saturday, Sundayor a public holiday.PAYE deducted at source is included in the individual’s self-assessment return anddeducted from the tax liability due on the total income.Where the tax liability for an individual is greater than the tax deducted at source(PAYE and withholding tax) and installment tax, the balance of tax is payable by 30thApril of the following year or the last working day before the 30th where this falls ona Saturday, Sunday or a public holiday.In the case of individuals where the final tax liability (after deduction of taxes atsource) is Shs 40,000 or less, no installment tax is payable. Where installment tax ispayable, the basis of calculation and the due dates for payment are similar to a nonagriculturalcompany (Section 4.2.8).Where tax is chargeable in Kenya on a Kenya citizen in respect of foreign employmentincome or on income earned from an appearance at an artistic performance or asporting event in a foreign country, and that person proves to the satisfaction ofthe Commissioner that he has paid tax in such other country, he shall be entitled toset-off by way of credit that tax paid in the foreign country against the tax payablein Kenya. The amount of set-off cannot exceed the tax liability in Kenya on the saidincome.38DOING BUSINESS IN KENYA
4.4 Withholding TaxWithholding tax is deducted on payment by a resident person or a non-resident personwith a permanent establishment on certain income deemed to have been derivedfrom Kenya (irrespective of whether paid to resident or non-resident persons).Withholding tax deducted is payable by the 20th day of the following month (or thelast working day before the 20th where this falls on a Saturday, Sunday or a publicholiday). Not later than end of February of the following year, a taxpayer is requiredto submit an annual return of withholding tax deducted and remitted to the KRA. Therates of withholding tax are as follows:ResidentTelecommunication services - 5%*NonresidentArtists and entertainers - 20%*Royalties 5% 20%*Dividends (1) / (2) 5%* 10%*Dividends paid to companies having 12.5% or more votingpowerRenting property other than immovable (equipment hire)(3)Interest (including Government bearer bonds of at least 2years duration) (4)Interest from bearer instruments excluding Governmentbearer bonds of at least 2 years duration (4)Interest on bearer bonds with maturity of 10 years andabove (4)Exempt 10%*- 15%*15% 15%*25% 25%*10% 25%*Housing bond interest (4)/(5) 10% 15%*Deemed interest on interest free loans in respect of thincapitalisation- 15%*Betting and gamming winnings 20% -Rent - land & buildings - 30%*Pension and taxable withdrawals from pension/ providentfunds (6)10-30%* 5%*Insurance commissions (7) 10% 20%*Contractual fees (8)/(9) 3% 20%*Management, professional or training fees (8)/(9)/(10) 10% 20%*Surplus pension fund withdrawals 30% 30%*Shipping business - 2.5%** Final taxDOING BUSINESS IN KENYA39
Page 7: 2.0 General2.1 IntroductionKenya li
Page 13 and 14: Kenya Tanzania Uganda Rwanda Burund
Page 15 and 16: A huge chunk of the Act regulates m
Page 17 and 18: • Stamping of the Memorandum of A
Page 19 and 20: the Registrar within a statutory pe
Page 21: 3.2.3 Thin CapitalisationThin capit
Page 24 and 25: Where a business is carried on or e
Page 26 and 27: territory or domestic market. Motor
Page 28 and 29: • Unrealised foreign exchange los
Page 30 and 31: 4.2.6 Business with Non-Resident Pe
Page 32 and 33: Installments Due Date RateNon-Agric
Page 34 and 35: The current Personal Income Tax rat
Page 36 and 37: c) Housing• The higher of market
Page 40 and 41: (1) East African Community partner
Page 42 and 43: Where the taxpayer still disputes w
Page 44 and 45: The VAT rates applicable in Kenya a
Page 46 and 47: 4.8.4 De-registration and Disposal
Page 48 and 49: • Payment is received for all or
Page 50 and 51: 4.8.7 Records, Invoices, Credit and
Page 52 and 53: A credit note should be serially nu
Page 54 and 55: However, where a motor vehicle or o
Page 56 and 57: Where there is no tax payable a ‘
Page 58 and 59: granted or is partly granted, the b
Page 60 and 61: • Airtime on cellular mobile phon
Page 62 and 63: Transit VisasThese are visas requir
Page 64 and 65: Class K is for persons who have an
Page 66 and 67: 5.3.2 WagesAlthough the Employment
Page 68 and 69: NSSF provides the employee with a l
Page 70 and 71: 6.0 ACCOUNTING6.1 Statutory Framewo
Page 72 and 73: 7.0 INTELLECTUAL PROPERTYRIGHTSKeny
Page 74 and 75: Years 1 Shs 1,000Year 2 Shs 1,500Ye
Page 76 and 77: 8.0 Listing Rules8.1 The Capital Ma
Page 78 and 79: • At the date of application, the
Page 80 and 81: 8.3 Payable FeesCompanies pay an in
Page 82 and 83: 9.0 Investing in Kenya9.1 General I
Page 84 and 85: 9.3 Foreign Ownership of Shares and
Page 86 and 87: Contact Details - RSM AshvirRSM Ash
Page 88 and 89:
Appendix of Acronyms used in the Bo
Page 90:
Notes90DOING BUSINESS IN KENYA
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