According to a recent report in the Kenyan nation newspaper, Kenya is set to sign a Double Taxation Avoidance Agreement, known as the DTA agreement, with China. The agreement will avoid double taxation on income and will exempt investors in both countries from paying twice as much tax. 重大利好!肯尼亚将与中国签署避免双重征税协定

It is understood that the agreement mainly deals with the principles of taxation of different types of income, such as business profits, dividends, interest, royalties, property gains, personal labor income, methods of eliminating double taxation, non-discriminatory treatment and so on.

The agreement will be ratified by the parliaments of China and Kenya, aiming to create a favorable environment for business activities such as investment and trade between the two countries.

Before Kenya signed the agreement, the Cabinet Secretary for National Treasury, Ukur Yatani, had consulted Kenyans.

China is Kenya’s main trading partner and the trade deficit between the two countries has widened as China’s exports to Kenya have increased year on year. Statistics released by the Kenya National Bureau of Statistics (KNBS) last month showed that the Kenyan trade deficit with China widened to KES 425.17 billion in the year to March 2022 from KES 370.58 billion a year earlier, an increase of 15 percent year-on-year; and that the value of China’s goods accounted for 20.27 percent of Kenya’s import bill, an increase of 15.23 percent year-on-year. Notably, Kenyan total exports to China have also continued to increase, growing by 26.09% year-on-year to a total value of Sh21.48 billion.

The signing of the Double Taxation Avoidance Agreement (DTA) between Kenya and China will reduce operational costs for Chinese investors in Kenya, which will also apply to Kenyan companies doing business in China.

This agreement will facilitate rapid growth in trade and investment between the two countries and will continue to strengthen the development of friendly bilateral relations between Kenya and China.