Income from management or professional fees, royalties, interest and rents
(1)
For the purposes of this Act, where a resident person or a person
having a permanent establishment in Kenya makes a payment to any other
person in respect of - Finance Act, 2014 effective 01January 2015
- (a) a management or professional fee or training fee; Finance Act 2008 Effective 13 June 08
- (b) a royalty or natural resource income Finance Act, 2014 effective 01January 2015;
- (c) interest and deemed interest Finance Act 2012 09 June 2011;
- (d) the use of property Finance Act 2009 Effective 12 June 2009 ;
- (e) an appearance at, or performance in, a public or private place for the purpose of entertaining, instructing, taking part in any sporting event or otherwise diverting an audience;
- (f) an activity by way of supporting, assisting or arranging an appearance or performance referred to in paragraph(e),
-
(g)
winnings from betting and gaming; winnings payable by bookmakers to punters (players).Finance Act, 2013 effective 1st Jan 2014 , Finance Act, 2015 effective 1stJan 2016 Finance Act, 2016 effective 01January 2017,Deleted by Tax Laws (Amendment) Act2018Effective 1st July 2018 - (g)
winningsDeleted by (FA 2025-wef 1st July-2025 S2). - (g) withdrawals; (FA 2025-wef 1st July-2025 S2).
- (gg)
a transaction under section 3(2)(f) for securities listed on any securities exchange approved under the Capital Markets Act.Deleted by Finance Act, 2015 effective 1st Jan 2016 - (h)
the amount or value of the consideration from sale of property or shares in respect of oil companies, mining companies or mineral prospecting companies.Finance Act 2012 09 January 2013,Deleted by Finance Act, 2014 effective 01 January 2015 - (i)
demurrage charges; andFinance Act, 2018, effective date 1 st July 2018.Deleted by Finance Act, 2019Effective 7th November 2019 - (j) an insurance or reinsurance premium the amount thereof shall be deemed to be income which accrued in or was derived from Kenya: Finance Act, 2018, effective date 1 st July 2018. Finance Act, 2019Effective 7th November 2019
- (k) sales promotion, marketing, advertising services, and transportation of goods (excluding air and shipping transport services. TLAA2020,wef25April2020
- (l) supply of goods to a public entity; (FA 2025-wef 1st July-2025 S5).
- (m) making or facilitating payment over a digital market place; (FA 2025-wef 1st July-2025 S5).
the amount thereof shall be deemed to be income which accrued in or was derived from Kenya:
Provided that -
- (i) this
sectionsubsection shall not apply unless the payment is incurred in the production of income accrued in or derived from Kenya or in connection with a business carried on or to be carried on, in whole or in part, in Kenya; Finance Act, 2014 effective 01 January 2015
- (ii) this
sectionsubsection shall not apply to a payment made, or purported to be made, by the permanent establishment in Kenya of a non-resident person to that non-resident person except for deductions provided for by agreements under section 41. Finance Act, 2014 effective 01 January 2015, Finance Act, 2019Effective 7th November 2019
- (iii) for the avoidance of doubt, the expression “nonresident person” shall include both head office and other offices of the non- resident person. Finance Act, 2014 effective 01 January 2015
(2)
A net gain referred to in section 3(2)(g) is deemed to be income that
accrued in or was derived from Kenya. Finance Act, 2014 effective 01 January 2015 (3*)
Where a payment has been made to a non-resident person, withholding tax paid thereon shall not be refundable or available for deduction against the income where an audit adjustment has been made in respect of such payment (Finance Act 2023 wef 1st-July-2023 s8*)
(4) Where a resident or a non-resident person, being the owner or operator of a digital marketplace or platform, makes or facilitates payment in respect of digital content monetisation, property or services, the amount thereof shall be deemed to be income which accrued in or was derived from Kenya. (TLAA 2024 wef 27th December, 2024 S4)
(5) In this section, “platform” means a digital platform or website that facilitates the exchange of a short-term engagement, freelance or provision of a service, between a service provider, who is an independent contractor or freelancer, and a client or customer. (TLAA 2024 wef 27th December, 2024 S4)