Kenya

Corporate - Withholding taxes

Last reviewed - 01 July 2021

WHT is levied at varying rates (3% to 25%) on a range of payments to residents and non-residents. Resident WHT is either a final tax or creditable against CIT. Non-resident WHT is a final tax.

Payments Resident WHT rate (%) Non-resident WHT rate (%)
Dividend > 12.5% voting power Exempt 15
Dividend < 12.5% voting power 5 15
Interest:    
Bearer instruments 25 25
Government bearer bonds (maturity ≥ 2 years) 15 15
Bearer bonds (maturity ≥ 10 years) 10 N/A
Other 15 15
Qualifying interest:    
Housing bonds 10 N/A
Bearer instruments 20 N/A
Other 15 N/A
Royalty 5 20
Winnings from gaming and betting 20 20
Management or professional fees 5 20
Consultancy fees - Citizen of EAC member states 5 15
Training (including incidental costs) 5 20
Rent/leasing:    
Immovable property N/A 30
Others (other than immovable) N/A 15
Pension/retirement annuity Varied (1) 5
Sales promotion, marketing, advertising services, and transportation of goods (excluding air and shipping transport services) 20 (2)
Insurance or reinsurance premiums 5 (3)
Contractual fees 3 20
Sale of property or shares in oil, mining, or mineral prospecting companies 10 20

Notes

  1. This will vary depending on the payments paid out.
  2. For EAC citizens, the rate shall not apply to transportation of goods.
  3. Shall not apply to insurance or reinsurance premiums paid for aviation that covers aircraft, cargo, and passengers.

Oil and gas sector WHT rates

WHT rates applicable on payments to non-residents in the oil and gas sector are shown in the table below:

Payments Non-resident (oil and gas) WHT rate (%)
Dividends 10
Interest 15
Natural resource income 20
Management or professional fees 10

Double tax treaties (DTTs)

Lower rates may apply to non-residents where there is a DTT in force. The table below shows the maximum rates of tax that recipients in those countries with a DTT with Kenya can be charged on dividends, interest, royalties, and management and professional fees. The table only includes agreements that are currently in force.

Recipient WHT (%)

Dividends Interest Royalties Management/ Professional fee
Canada 15 15 15 15
Denmark 20 20 (1) 20 20
France 10 12 10 (5)
Germany 15 15 (1) 15 15
India 10 10  10 10
Iran 5 10 10 (5)
Norway 15 20 (1) 20 20
Qatar 5 (4) 10 10 (5)
South Africa 10 10 10 (5)
South Korea 10 (3) 12 10 (5)
Sweden 15 15 20 20
United Arab Emirates 5 10 10 (5)
United Kingdom 15 15 (1) 15 12.5
Zambia 0 (2) 0 (2) 0 (2) 20

Notes

  1. Interest paid by the government and the Central Bank of Kenya is tax-exempt.
  2. No Kenya tax is due if subject to tax in Zambia.
  3. 8% if the beneficiary holds at least 25% of the capital of the company paying the dividends.
  4. A rate of 10% is applicable where the beneficial owner is a company (other than a partnership) that directly or indirectly holds less than 10% of the capital of the company paying the dividends.
  5. The treaties do not contain separate Articles on 'management or professional services'. Under the OECD model tax agreement guidelines, such income from such services should be taxed only in the country of residence of the recipient of the income unless the source country has taxing rights in accordance with the Article dealing with 'business profits' (i.e. where there is a PE in the other state). However, the KRA has in the past taken the position that the 'management or professional fees' would fall under the Article on 'other income' and should therefore be subject to WHT at 20%.

Where the treaty rate is higher than the non-treaty rate, the lower rate applies.