Section 39

C-Set-off Tax- (This covers Sections 39, 39A & 39B)

39-Set-off of tax

(1)

An amount of tax which –

• (a) has been deducted under section 17A (in respect of a person other than an individual)*, 35, 36 or 37, or Deleted by (FA 2025-wef 1st July-2025 S20).
• (b) has been borne by a trustee, executor or administrator in his capacity as such on an amount paid as income to a beneficiary,
• (c) has been paid by a person under section 12A.

shall be deemed to have been paid by the person chargeable with that tax and shall be set off for the purposes of collection against the tax charged on that person for the year of income in respect of which it was deducted, and where an assessment is made by the Commissioner on a person for a year of income under section 73 the amount of tax which has already been paid under a provisional assessment on that person for that year of income shall be set off for the purposes of collection against the tax charged in the assessment made under section 73.

(2)

If any citizen of Kenya chargeable to tax in Kenya for any year of income on employment income or income in respect of any activity under section10(e)  section10(1)(e)* of this Act accrued in or derived from another country proves to the satisfaction of the Commissioner that he has paid tax in such other country for such year of income in respect of the same income, he shall be entitled to set-off by way of credit of the same tax against the tax charged in Kenya on such income. (Finance Act 2022-wef-01-July-2022)*

(3)

The tax chargeable on the income of any person in respect of which setoff is to be allowed under this section shall be taken to be the amount by which the tax chargeable (before set-off under this section) in respect of his employment income or income specified under section10(e)  section10(1)(e)* is increased by the inclusion of such income in his employment income or income specified under section10(e)  section10(1)(e)*.    (Finance Act 2022-wef-01-July-2022)*

(4)

Credit under this section shall not exceed the amount of tax payable in Kenya on such employment income or income in respect of any activity under section10(e)  section10(1)(e)*. (Finance Act 2022-wef-01-July-2022)*

 39A. Set-off of import duty.  (Repealed by Finance Act 2009, s. 26)

39B - Set-off tax rebate for apprenticeships Finance Act, 2015 effective 1st Jan 2016 

(1)

Any employer who engages at least ten university or technical and vocational education and training* graduates as apprentices for a period of six to twelve months during any year of income shall be eligible for tax rebate in the year subsequent to the year of such engagement. (Finance Act 2021- wef-01Jan2022)*

(2)

The Cabinet Secretary may by notice in the Gazette make regulations for the better carrying out of the provisions of this section.

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