With a deep understanding of the ever-evolving tax landscape in Kenya, Clay & Associates Advocates offers a wide range of tax legal services designed to help you achieve your financial goals while ensuring compliance with applicable tax laws and regulations.
Our experienced tax lawyers provide expert advice and guidance in areas such as:
Tax Planning and Advisory
Tax Compliance
Tax Disputes and Litigation
International Taxation
Tax Incentives and Exemptions
Estate and Succession Planning
We work with companies of all sizes in sectors such as finance, technology, retail, real estate, hospitality, fashion, and luxury brands. Our lawyers combine sector knowledge and global experience to advise on the right tax arrangements for your business.
If you are thinking of moving between countries for more than a short-term holiday, whether to take a secondment for a few years to advance your career, seek better education for your children, escape political or social upheaval, or simply to reside in a more congenial atmosphere, you may find there is enormous benefit to taking tax advice.
Our experienced tax lawyers provide expert advice and guidance in areas such as:
Multi-jurisdictional transactions
Foreign inbound companies looking to establish their regional/continental presence in Kenya
Pre and post-immigration tax advice
Compliance, reporting and disclosure
Employee incentives and share schemes
Real estate tax on development projects
Both tax litigation and ADR are options for resolving tax disputes with the Kenya Revenue Authority (KRA) in Kenya, but they differ significantly in approach:
Tax Litigation:
* Formal Process: Involves filing a case with the Tax Appeals Tribunal (TAT) or Kenyan courts.
* Adversarial: Each side argues their position, aiming to convince a judge or tribunal member of their case’s merits.
* Lengthy & Costly: Court proceedings can take months or even years, and legal fees can be substantial.
* Public Record: The details of the dispute become part of the public court record.
* Outcome: A judge or tribunal member delivers a binding decision, favoring one party over the other.
ADR (Alternative Dispute Resolution):
* Informal Process: Utilizes negotiation, mediation, or facilitation for an out-of-court settlement.
* Collaborative: Focuses on finding a mutually agreeable solution through guided discussion.
* Faster & Less Costly: ADR typically resolves issues quicker and at a lower cost compared to litigation.
* Confidential: The details of the dispute remain confidential unless both parties agree otherwise.
* Outcome: If successful, a settlement agreement is reached that both parties can accept.
Choosing the Right Option:
* Suitable for Litigation: Complex disputes with significant tax amounts at stake, or where a strong legal precedent needs to be established.
* Suitable for ADR: Simpler disputes, situations where maintaining a good relationship with the KRA is important, or when a faster resolution is desired.
It’s difficult to provide an exact cost for hiring our law firm’s services for a dispute with the KRA as fees can vary depending on several factors:
Complexity of the Case: Straightforward disputes with smaller tax amounts will likely cost less than intricate cases involving significant sums or complex legal issues.
Lawyer’s Experience: Lawyers with extensive experience and a proven track record in tax litigation typically command higher fees compared to those with less experience.
Billing Structure: Depending on your unique needs, we may use different billing structures. In some cases we charge by the hour, with rates ranging from as low as Ksh 3,000 to Ksh 15,000 (US$30 – US$150) or more per hour depending on experience and seniority within our firm. In other situations, we may offer flat fees for specific services or retainer agreements for ongoing representation.
Here are some suggestions for getting a better idea of the cost:
Consultations: we offer a low-cost consultation fee of Ksh 3,000 per hour (USD$30) where you can discuss your case with us and get an estimate of our fees immediately after or sometimes during the consultation.
Direct Communication: Contact us directly and enquire about our experience in tax disputes and our fee structure.
Remember, the initial consultation is a crucial opportunity to discuss your case, understand our approach, and get a clearer picture of the potential costs involved.
Kenya does apply double taxation treaties (DTAs) to avoid taxing the same income twice. Here’s how it works:
* DTA Agreements: Kenya negotiates and signs DTAs with other countries. These agreements specify how taxing rights are allocated between Kenya and the other country for various income types (e.g., dividends, royalties, business profits).
* Tax Relief: If you are a resident of a country with a DTA with Kenya, you might be entitled to tax relief in Kenya under the terms of that agreement. This could involve reduced tax rates on certain income sources or even exemption from Kenyan tax altogether.
Finding Applicable DTA:
* To determine if a DTA applies to your situation, you’ll need to know:
* Your residency for tax purposes
* The country where the income arises
With this information, you can consult the list of Kenya’s DTA partners to see if there’s a relevant agreement in place. The specific details of the DTA will then determine how taxation is handled.
It’s important to note:
* DTAs are complex legal documents. Consulting with a tax advisor familiar with Kenyan tax law and the relevant DTA is recommended for a clear understanding of how it applies to your specific situation.
Before any fees, we’ll first schedule a consultation to listen and learn more about your situation.
The session is an hour long, and there are no obligations to engage our services afterward.
As part of the consultation, we’ll lean on our years of experience as tax lawyers to suggest the best solution for you or your business.
With a deep understanding of the ever-evolving tax landscape in Kenya, we offer a wide range of tax legal services designed to help you and your business achieve your financial goals while ensuring compliance with applicable tax laws and regulations.
Our experienced tax lawyers provide expert advice and guidance in areas such as:
1. Tax Planning and Advisory: We work closely with businesses and individuals to develop effective tax strategies that optimize tax efficiency, minimize tax liabilities, and maximize savings. Our team stays up-to-date with the latest tax laws and regulations to provide you with accurate and timely advice tailored to your unique circumstances.
2. Tax Compliance: We assist businesses and individuals in meeting their tax compliance obligations, including filing tax returns, preparing financial statements, and ensuring compliance with reporting requirements. Our meticulous approach helps you avoid penalties and navigate the complexities of tax compliance with ease.
3. Tax Disputes and Controversies: In the event of a tax dispute or controversy, our skilled litigators provide strong representation to protect your rights and interests. We have extensive experience handling tax audits, investigations, appeals, and negotiations with tax authorities. Our goal is to achieve favorable resolutions and minimize any adverse impact on your financial standing.
4. International Taxation: For businesses engaged in cross-border transactions or individuals with international tax concerns, we offer specialized guidance on international tax planning, transfer pricing, double taxation treaties, and foreign tax compliance. We help you navigate the complexities of international taxation to ensure compliance and optimize tax efficiencies.
5. Tax Incentives and Exemptions: Our team is well-versed in identifying and maximizing available tax incentives, exemptions, and deductions. We assist businesses in leveraging government programs and incentives to reduce their tax burdens and promote growth.
6. Estate and Succession Planning: We provide comprehensive estate and succession planning services to individuals and families, helping them preserve and transfer wealth in a tax-efficient manner. Our personalized approach considers your unique circumstances and objectives to develop tailored estate plans that protect your assets and minimize tax liabilities.
When you receive a demand notice from the Kenya Revenue Authority (KRA), it is important to take prompt action to address the situation. Here are the steps you can follow:
1. Review the Notice: Carefully read and understand the contents of the demand notice. It will specify the nature of the tax liability, the amount owed, and the period for which the tax is due. Ensure that you have accurate information about the tax assessment and the reasons provided by the KRA.
2. Verify the Accuracy: Verify the accuracy of the demand notice by comparing it with your tax records and supporting documents. Look for any discrepancies or errors that may have led to an incorrect tax assessment. If you believe there are errors, gather the necessary evidence to support your position.
3. Seek Professional Assistance: Consider engaging a tax lawyer or tax consultant who specializes in tax dispute resolution. They can provide expert advice, review your tax records, and guide you through the process. They will also represent your interests in dealing with the KRA.
4. Respond within the Timeline: The demand notice will specify a timeframe within which you must respond. Ensure that you adhere to the given timeline. Failing to respond within the deadline may lead to further penalties or legal consequences.
5. Prepare a Response: Prepare a formal response to the demand notice. Clearly outline your objections or reasons for disputing the tax assessment. Include any supporting documents, such as financial records, invoices, or receipts, that can substantiate your claims. It is essential to provide a well-documented and reasoned response to strengthen your case.
6. Engage in Communication: Maintain open and respectful communication with the KRA. Respond promptly to any additional information or queries they may require. Cooperating and providing relevant information can facilitate the resolution process.
7. Seek Dispute Resolution: If you are unable to reach a resolution through communication with the KRA, explore alternative dispute resolution mechanisms. This may involve engaging in mediation or arbitration to settle the dispute. A tax lawyer can guide you through the process and represent your interests during the dispute resolution proceedings.
8. Payment or Negotiation: If you agree with the tax assessment, it is advisable to pay the outstanding amount within the specified timeline to avoid further penalties or legal actions. However, if you believe the tax assessment is incorrect, negotiate with the KRA to reach a resolution that is fair and acceptable to both parties.
Remember, addressing a demand notice from the KRA requires careful consideration and professional guidance. By seeking assistance from tax professionals and engaging in proactive communication, you can navigate the process effectively and protect your rights.
When running an international business in Kenya, several taxes may apply depending on the nature and activities of your business. Here are some key taxes to be aware of:
1. Corporate Income Tax (CIT): This tax is imposed on the profits earned by a company in Kenya. The current standard rate for CIT is 30% of taxable income, although certain sectors may have different rates or tax incentives. It is important to comply with the filing and payment obligations as stipulated by the Kenya Revenue Authority (KRA).
2. Value Added Tax (VAT): VAT is a consumption tax levied on the supply of goods and services. The standard VAT rate in Kenya is 16%, with some goods and services being exempt or zero-rated. VAT-registered businesses are required to charge, collect, and remit VAT to the KRA on their taxable supplies.
3. Pay As You Earn (PAYE): If your business employs staff in Kenya, you will be required to deduct and remit income tax from their salaries through the PAYE system. The rates and thresholds for PAYE are determined by the KRA, and employers are responsible for ensuring compliance with the tax obligations related to their employees’ income.
4. Withholding Taxes: When making payments to non-resident individuals or entities, certain payments may be subject to withholding taxes. These include dividends, interest, royalties, and fees for technical or professional services. The rates and requirements for withholding taxes are specified in the Income Tax Act, and it is the responsibility of the payer to withhold and remit the tax to the KRA.
5. Customs and Excise Duties: If your business involves importing or exporting goods, customs duties and excise taxes may apply.
Customs duties are imposed on imported goods based on their value and classification, while excise duties are levied on specific goods such as tobacco, alcohol, and petroleum products. Compliance with customs and excise requirements is essential for international trade operations.
6. Capital Gains Tax (CGT): Capital gains tax is applicable when there is a transfer of property or assets that results in a gain. The current CGT rate in Kenya is 5% for residents and 20% for non-residents. Specific exemptions and provisions may apply, and it is important to consult with tax professionals for proper guidance.
These are some of the key taxes that international businesses may encounter while operating in Kenya. It is crucial to engage with tax professionals who can provide specialized advice tailored to your business activities and help ensure compliance with the tax laws and regulations in Kenya. The Kenya Revenue Authority (KRA) is the primary regulatory body responsible for administering and enforcing tax laws in the country.
Years of Experience
Whether you are a business seeking strategic tax planning, an individual with personal tax concerns, or facing a tax dispute, our team of experienced tax lawyers is ready to provide you with expert guidance and representation.
Contact us today to schedule a consultation and let us be your trusted advisor in all your tax legal matters.