Income tax treaties begin with the recitation that they are entered into between countries for the purposes of avoiding double taxation of international income flows, and the prevention of fiscal evasion with respect to taxes on income and capital gains. According to international law as presented in Vienna Convention on the Law of Treaties 1969...
The world’s tax treaties are based on precedents found in an OECD model tax convention or a UN model tax convention. Both models divide taxing rights on cross-border investment and business activities. The OECD model shifts taxing rights to capital exporting (residence) treaty partners while the UN treaty allows capital importing countries (Source country) to...
To promote and enforce fair trade practices between countries, the World Trade Organization (WTO) headquartered in Geneva, Switzerland was formed in 1995. Currently, WTO has 164 member states with 25 other countries negotiating for membership. The institution which currently has oversight on 98% of global trade; is the successor of the General Agreement on Tariffs...
According to OECD model for tax convention, intangibles are intended to address things that are not physical assets or financial assets; but which are capable of being owned or controlled for use in commercial activities. In addition, the use or transfer of these intangible assets would be compensated had it occurred in a transaction between...
Kenya through its proposed Finance bill 2021, introduced documentation guidelines for Multinational Enterprises (MNEs) operating locally through their subsidiaries. This comes at a time when globally jurisdiction members under Organization for Economic Cooperation and Development (OECD) are racing to implement Inclusive framework on BEPS (Base Erosion and Profit Shifting) to combat illicit financial flows, tax...
Globally, countries especially across Middle East (Gulf countries) and Africa like Tunisia, Uganda and Egypt are racing towards implementing electronic tax invoice. The wave is already being felt locally with Kenya Revenue Authority (KRA) rolling out the hardware-based electronic tax invoicing which commenced on 1st August 2021; with a deadline for complying extended to 31st...
M&A activity in Kenya for the last three years saw key sectors deal closures and exits. The sectors included but not limited to; Financial services sector; DE La Rue Kenya Ltd (a subsidiary of De La Rue Plc) wholly acquired by American Company, HID Corporation Ltd. Banking sector; Kenya Commercial Bank (KCB) acquired National Bank...
In the recent years, the global financial sector has experienced rapid development of new financial products and intermediaries such as Decentralized Finance (DeFi). This is in a bid to meet the varying needs for investors and consumers in different demographics; with countries racing to bridge the financial inclusion gap. Decentralized Finance (DeFi) is a fast-developing...
The digital economy has gained significant importance within the global economy as a driver of innovation and competitiveness. In Africa, Kenya has positioned itself as a leader in access to digital infrastructure; with 98% of its citizen owning sim cards, and 65% of the population having access to the internet. The high internet penetration in...
Finance Bill, 2022/23 Proposed Amendments on Transfer Pricing Documentation The finance bill 2022 was received in the National Assembly on 12th April 2022 for debate. The income tax amendments section 18C has been introduced to include notification to the commissioner by a multi-national enterprise (MNE) group on the following disclosures not later than the last...