Revised India-Kenya Double Taxation Avoidance Agreement notified

The Central Board of Direct Taxes (CBDT) on Thursday said the revised Double Taxation Avoidance Agreement (DTAA) between India and Kenya has been notified.

The agreement was signed and notified in 1985 and subsequently renegotiated and in July, 2016.

As per the latest revision, the DTAA provides for reduction in withholding tax rates from 15 to 10 percent on dividends, 15 to 10 percent on interest, 20 to 10 percent on royalties and 17.5 to 10 percent on fees for management, professional and technical services, in a bid to promote cross border flow of investments and technology.

Furthermore, the agreement sanctions a new article on limitation of benefits to allow treaty benefits to bonafide residents of both countries, to combat treaty abuse by third country residents and to allow application of domestic law to prevent tax avoidance or evasion. The article has been updated to the latest international standard to provide for exchange of information, including banking information for tax purposes, to the widest possible extent.

A new article on assistance in collection of taxes has also been provided in the revised treaty which will enable assistance in collection of tax revenue claims between both countries.

The revised DTAA, the CBDT said, will improve transparency in tax matters, help curb tax evasion and tax avoidance, remove double taxation and will stimulate the flow of investment, technology and services between India and Kenya.