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|
|Government bearer bonds (maturity ≥ 2 years)||15||15|
|Bearer bonds (maturity ≥ 10 years)||10||N/A|
|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|
|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)|
|Sale of property or shares in oil, mining, or mineral prospecting companies||10||20|
- This will vary depending on the payments paid out.
- For EAC citizens, the rate shall not apply to transportation of goods.
- 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 (%)|
|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.
|Dividends||Interest||Royalties||Management/ Professional fee|
|South Korea||10 (3)||12||10||(5)|
|United Arab Emirates||5||10||10||(5)|
|United Kingdom||15||15 (1)||15||12.5|
|Zambia||0 (2)||0 (2)||0 (2)||20|
- Interest paid by the government and the Central Bank of Kenya is tax-exempt.
- No Kenya tax is due if subject to tax in Zambia.
- 8% if the beneficiary holds at least 25% of the capital of the company paying the dividends.
- 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.
- 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.