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Kaigangio
#1 Posted : Monday, November 16, 2009 6:56:00 AM
Rank: Elder


Joined: 2/27/2007
Posts: 2,768
hi all,

i have a friend living and working in Switzerland.....He intends to return for good in one years time (December 2010)...the guy wishes to register a company and a respective company account with a local bank before the end of this year.

it is his intention that by the time he returns he should have transfered some funds equal to US $150k or about ksh 12m to the company account as the starting capital. the funds transfer shall be carried out as a monthly exercise,sending an average of US $12k to 15k (ksh 900k to 1.2m). he intends to do his first transfer at the end of Dec 2009. his dilemma is,


at the end of the year 2010 since he will not have started yet (as he will still be accumulating the starting capital) will his ksh 12m be subjected to taxation?
is there any provisions in the KRA regulations for one to declare such funds since this is not an income (during the period starting Dec 2009 to Dec 2010) in as far as the company is concerned?

for those SKerians with the knowhow,any advise and help is most welcome...


NEVER TALK OF A RHINO IF THERE IS NO TREE NEAREBY - ZULU PROVERB
...besides, the presence of a safe alone does not signify that there is money inside...
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Mainat
#2 Posted : Monday, November 16, 2009 7:12:00 AM
Rank: Veteran


Joined: 11/21/2006
Posts: 1,590

There is no taxation on capital,only on income/profits made.
there is no taxation on remittances-otherwise they'd be much lower than they are now.


www.mjengakenya.blogspot.com
Sehemu ndio nyumba
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Waria
#3 Posted : Monday, November 16, 2009 8:33:00 AM
Rank: Member


Joined: 10/11/2007
Posts: 213
Just to muddy it a bit...Overseas transfers of above 5k usd? to a company ac need initial clearance with CBK/treasury? as to their purpose

From this change good will come
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Mainat
#4 Posted : Monday, November 16, 2009 8:57:00 AM
Rank: Veteran


Joined: 11/21/2006
Posts: 1,590
Waria- is that a new law? I know peeps who routinely send £10k to company a/cs

www.mjengakenya.blogspot.com
Sehemu ndio nyumba
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selah
#5 Posted : Monday, November 16, 2009 10:54:00 AM
Rank: Elder


Joined: 10/13/2009
Posts: 1,950
Location: in kenya
@ waria

When was the law changed from 10k usd.


you can achive all things through Him(Jesus Christ)
'......to the acknowledgment of the mystery of God, and of the Father, and of Christ; 3 In whom are hid all the treasures of wisdom and knowledge.' Colossians 2:2-3
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Kaigangio
#6 Posted : Monday, November 16, 2009 11:36:00 AM
Rank: Elder


Joined: 2/27/2007
Posts: 2,768
@ mainat,

thanks chief

@ waria,

if it is true that initial clearance with CBK or treasury is required for transfer for whichever amount,what is the procedure as i can't imagine one having to come to Nairobi prior to a transfer to notify the regulating entities?


NEVER TALK OF A RHINO IF THERE IS NO TREE NEAREBY - ZULU PROVERB
...besides, the presence of a safe alone does not signify that there is money inside...
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Douvante
#7 Posted : Monday, November 16, 2009 12:57:00 PM
Rank: Member


Joined: 5/14/2008
Posts: 55
Any tax expert here? A friend of mine got a job at Lesotho and he is not paying tax in that country.Is he liable to pay tax here in Kenya .

Everything happens for a reason.
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Mkimwa
#8 Posted : Monday, November 16, 2009 1:52:00 PM
Rank: Member


Joined: 10/26/2008
Posts: 380
@ Douvante,

Kenya has no double taxation agreement with Lesotho. In light of that,if they are resident persons in Kenya,then,they will be liable to pay tax in Kenya.

From income act:
an amount paid to a person who is,or was at the time of the employment or when the services were rendered,a resident person in respect of any employment or services rendered by him in Kenya or outside Kenya shall be deemed to have accrued in or to have been derived from Kenya.

as such would be taxable in Kenya.

Definition of residency:
'resident' w.r.t to an individual means -
(i) that he has a permanent home in Kenya and was present in Kenya for any period in a particular year of income under consideration; or
(ii) that he has no permanent home in Kenya but -
(A) was present in Kenya for a period or periods amounting in the aggregate to 183 days or more in that year of income; or
(B) was present in Kenya in that year of income and in each of the two preceding years of income for periods averaging more than 122 days in each year of income;

Am no expert though!
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