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After having been signed 2 years ago in May 2014, the DTAA between Kenya and Mauritius has finally been ratified in May 2014 and same shall take effect from 1 January 2015. This new treaty opens up an array of opportunities for both countries.

With a Gross Domestic Product nearing the USD 80 billion mark (in terms of Purchasing Power Parity), Kenya is one of the largest economies in Africa. Furthermore, with a net Foreign Direct Investment into the country in excess of USD 250 million (year end 2012), Kenya shows significant growth prospects in many sectors. This new tax treaty with Kenya will definitely boost the reputation of Mauritius as financial centre of substance for investing in Kenya and Africa as a whole.

We have provide hereunder a summary of the main and attractive features of this Mauritius-Kenya Tax Treaty.

1. Dividends
Dividends may be taxed in the state in which the recipient is resident. It may also be taxed in the state in which it arises, but if the beneficial owner is resident of other state, tax so charged shall not exceed:
-> 5% of the gross amount of dividend provided a minimum shareholding of 10% is maintained in the company paying the dividends; and
-> 10% of the gross amount of dividend in all cases.

2. Interest
Interest may be taxed in the state in which the recipient is resident. It may also be taxed in the state in which it arises, but if the beneficial owner is resident of other state, tax so charged shall not exceed 10% of the gross amount of the interest.

3. Royalties
Royalties may be taxed in the state in which payee is resident. Royalty may also be taxed in the state in which it arises, but if the beneficial owner is resident of other state, tax so charged shall not exceed 10% of the gross amount of the royalty.

4. Capital gains
Capital gain arising from transfer of shares of a company shall be taxable only in the state in which the transferor is resident. Accordingly, where in case the transferor is resident in Mauritius, the provisions of the DTAA provides for the Mauritius Taxation to be applied for sale of shares. Consequently, there shall be no taxes on the transfer of shares since there is no capital gains taxes in Mauritius.

Should you be in need of any supplementary information on how to structure your business to take the advantage the DTAA between Kenya and Mauritius, we will be delighted to assist you.


The Management
Alliance Trust