The Income Tax Act (Charitable Organisations and Donations Exemptions) Rules, 2024, (the “Rules”) were gazetted on 18 June 2024.
Our Tax practice provides advisory, compliance and tax dispute resolution services. Our tax lawyers have extensive experience in supporting clients in the finance, manufacturing, agriculture, telecommunications, infrastructure and service sectors. Drawing on national, regional and international exposure and know-how, the team provides practical solutions to the complex tax issues that arise in businesses.
Our lawyers’ background in tax law and accounting enables us to analyze transactions and business structures to provide pragmatic solutions for today’s dynamic and challenging environment. The team provides the full range of tax services that address the complex challenges faced by businesses. Our tax compliance and advisory services are designed to optimize business operations.
Our tax lawyers are specialized in managing and resolving tax disputes, including attending to tax audits by the Kenya Revenue Authority, representing clients in tax appeals at the Tax Appeals Tribunal and the High Court of Kenya.
The team liaises closely with lawyers from the firm’s other practice groups to ensure our clients are provided with fully-integrated legal services.
Our tax team regularly advises our clients regarding compliance on the various obligations for employers in Kenya in relation to the tax effects of employee compensation, including pay packages or incentives to employees.
We assist with timely registrations for tax personal identification number (PIN), National Social Security Fund (NSSF), National Hospital Insurance Fund (NHIF) and National Industrial Training Authority (NITA) for employers and employees.
We also provide periodic tax compliance services including: tax computation, filing returns and tax payment and processing services, preparing annual tax schedules for employees and filing various returns registration for employees.
Key contacts
Our tax lawyers focus on complex tax controversy matters, including: attending to tax audits by the Kenya Revenue Authority, administrative appeals at the tax appeals tribunals and the courts as well as criminal tax matters, representing clients in alternative dispute resolution sessions, making tax refund claims, and voluntary disclosures.
We represent multinational corporations, privately-owned companies, partnerships, limited liability companies, high-net-worth individuals and trusts and estates in all aspects of sophisticated tax controversies and criminal tax matters.
Key contacts
The tax team also provides clients with ad-hoc value-added services including: preparing annual post-budget briefings to highlight the tax changes proposed during the annual budget statement and publishing regular tax alerts on legislative and administrative changes in the tax regime.
They also assist clients to apply for tax exemptions on behalf of not-for-profit and public benefit entities and provide tailor-made in-house tax training solutions.
Key contacts
Our tax lawyers in Kenya are committed to advancing transactions to meet the objectives of our clients.
In doing so, they work closely with the teams handling various deals and transactions in the other practice groups. They also collaborate often with our clients’ internal tax and accounting departments, as well as outside accounting firms, to design the most advantageous structure yielding optimal after-tax results, lowering effective tax rates or otherwise achieving our clients’ commercial and tax specific goals.
Key contacts
With the continuing globalization of our economy, as well as the resulting increase in cross-border transactions and the complexity of domestic and international laws and regulations, multinational companies increasingly recognize the importance of proactively managing transfer pricing to limit related tax risks and take advantage of planning opportunities.
Our lawyers in Kenya are well positioned to help companies address their transfer pricing challenges and opportunities.
They also provide advice on tax treaty interpretation and application to both institutional and individual clients with interests in Kenya.
Key contacts
VAT affects nearly all transactions involving the provision of goods or services from Kenya, whether to clients located within or across the border.
An understanding of how VAT operates is essential if businesses are to avoid failing to charge VAT when appropriate and unnecessary costs in terms of not being able to reclaim VAT charged to them.
Our lawyers advise clients on the incidence of VAT, how to structure commercial transactions in a VAT-efficient way and registration and compliance generally.
Key contacts
Experience has included advising:
- The financiers of a power project in Kenya on all the taxes applicable to the project, tax saving mechanisms and applicable exemptions.
- A number of multinational financial institutions undergoing a tax audit by the Kenya Revenue Authority (KRA), objecting to the assessment and appealing against the final tax decision.
- Non-profit organizations on the applicability of tax exemptions under host country agreements signed with the Kenyan government and under the tax laws in Kenya.
- Foreign investors in the structuring of their businesses in East Africa, including investing in real estate in Kenya and advising on the most suitable and tax optimal investment vehicle.
- A multinational entity on the taxes applicable upon acquisition of another entity with branches and subsidiaries in various countries including Kenya.
- High-net-worth individuals with assets around the world on the applicability of the tax amnesty provisions to their income and assisting them to comply with the requirements.
- A foreign investor on the most suitable jurisdiction for the location of their holding company, taking into account the double tax treaties that are in force.
- A multinational company seeking to register the first special economic zone (SEZ) in Kenya on the applicable taxes and tax incentives upon registration and running of the SEZ.
- World Tax Award (International Tax Review 2022)
On 31 July 2024, the Court of Appeal rendered its judgement in Civil Appeal No. E003 of 2023 (as consolidated with Civil Appeal Nos. E016, E021, E049 and E064 and E080 of 2024) (“the Appeal”) in relation to the constitutionality of the Finance Act 2023 (“the Act”).
Changes in business ownership will usually take one of two forms; one could sell the shares in a company together with its underlying assets and liabilities or simply sell the underlying assets and liabilities of the company. There are many commercial and legal reasons that inform why a potential investor would opt to purchase the shares of a company instead of the underlying the assets and liabilities of the company or vice-versa. One of the reasons could be the tax impact each option would have.
The President of Kenya, through a public address on 25th March 2020 announced several income tax and Value Added Tax (VAT) interventions that are aimed at cushioning Kenyans from the crippling effects of the COVID-19 pandemic.
The income tax measures are contained in the Tax Laws Amendment Bill, 2020. We have prepared a tax alert highlighting the proposed tax amendments and providing insights on the implications of the proposals.