Visa Awareness: Countries Kenyans Should Check for Double Taxation Before Applying


Taglines

  • Kenya signed its first Double Taxation Agreement with Zambia in 1968. 
  • 14 Countries Have Signed DTAs with Kenya and are in Force.
  • 15 Countries Are Still Considering the DTA. 

Since taking office, President William Ruto’s administration has been in the process of overhauling the tax regime by eliminating double taxation for Kenyans in the Diaspora.

The tax principle involves paying taxes twice on the same source of income. This means that one is taxed in two different countries; their country of residence and home country and can occur at the corporate level and/or at an individual level.

In April, President Ruto ordered the Ministry of Treasury to overhaul the country’s taxing space to enable a better working environment for those working abroad.

“All you need to do is to file your return and state what you have paid and we will give you a tax credit for what you have paid so that you do not pay taxes twice,” President Ruto stated during a meeting with Kenyans residing in Ghana on April 2, 2024.

As such, the National Treasury has been spearheading the process, seeking to eliminate double taxation with neighbouring and global countries.

Recently, the Treasury announced the process of engaging with the Republic of Belarus to strike a Double Taxation Agreement (DTA) to forge stronger ties between the two countries.

DTAs are international agreements to allocate taxing rights between the said parties to avoid double taxation at the international level.

Kenyans.co.ke gives a breakdown of double taxation and nations that Kenya has either concluded or is in the process of eliminating double taxation.

Nations Whose DTAs are In Force With Kenya

Canada, Denmark, France, Germany, Iran, Korea, Norway, Qatar, Seychelles, South Africa, Sweden, United Arab Emirates (UAE), United Kingdom and Zambia.

What This Means

This means that Kenyans working in these nations can conduct business without worrying about being taxed twice.

Nations Who Have Concluded Agreements But Not Signed

Botswana, Nigeria, Portugal, Saudi Arabia, Singapore, Thailand, Turkey

What This Means

Kenyans living in these nations still face double taxation until Kenya and the host country formally sign the agreement.

Signed (Not in Force)

China, East African Community, Italy, Kuwait, Mauritius, Netherlands

What This Means

Kenyans living in these areas still face double taxation as the host nation has yet to enforce the agreement.

Under Consideration

Algeria, Cameroon, Democratic Republic of Congo (DRC), Ethiopia, Ghana, Ivory Coast, Jordan, Macedonia, Malawi, MozambiqueRussia, Senegal, South Sudan, Sudan, Zimbabwe.

What This Means

Kenya and these countries are currently engaging in talks regarding the DTA though nothing has been formalised. 

Advantages of Eliminating Double Taxation for Businesses

This presents an opportunity for businesses to reinvest more of their profits leading to expansion, innovation, and job creation.

Eliminating double taxation reduces the tax burden on business owners thus lowering their expenses.

Countries that enforce DTA become attractive destinations for foreign investors, leading to foreign direct investment and thus stimulating economic growth.

Double taxation presents a complex system for businesses operating in multiple jurisdictions hence removing the principle simplifies tax compliance.

DTAs also create a favourable environment for businesses to be internationally competitive. 

President William Ruto (second left) with Trade CS Rebecca Miano (left) and other regional leaders in Bujumbura.

Photo

The Brief

 



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