This document is the Double Taxation Relief (Federal Republic of Germany) Notice, 1980, which contains the Schedule of arrangements made between the Government of the Republic of Kenya and the Government of the Federal Republic of Germany to avoid double taxation on taxes on income and capital.Taxes Covered (Article 2)The Agreement applies to taxes on income and capital imposed on behalf of each Contracting State. The existing taxes are:

• Federal Republic of Germany: Income tax (Einkommensteuer), corporation tax (Körperschaftsteuer), capital tax (Vermögensteuer), and trade tax (Gewerbesteuer), including the surcharges (Ergänzungsabgabe) thereon.

• Kenya: Income tax.

Withholding Tax Rates

• Dividends (Article 10): Tax in the State of the company paying the dividends shall not exceed 15% of the gross amount. However, German tax on dividends paid to a Kenyan company that owns at least 25% of the German company's voting shares shall not exceed 25% if the German corporation tax rate on distributed profits is lower than on undistributed profits by 15 percentage points or more.

• Interest (Article 11): Tax in the State where the interest arises shall not exceed 15% of the gross amount. Interest paid to the Government or Central Bank of the other State is exempt.

• Royalties and Management Fees (Article 12): Tax in the State where they arise shall not exceed 15% of the gross amount.

Key Definitions and Rules

• Resident (Article 4): A person liable to tax in a Contracting State by reason of domicile, residence, place of management, or similar criteria.

• Permanent Establishment (Article 5): A fixed place of business, including a building site or construction or assembly project existing for more than six months.

• Business Profits (Article 7): Taxable only in the State of the enterprise unless business is carried on through a permanent establishment in the other State.

• Shipping and Air Transport (Article 8): Profits from international traffic are taxable only in the enterprise's Contracting State.

Elimination of Double Taxation (Article 23)

• Germany: Generally excludes income and capital that may be taxed in Kenya, but allows a credit for Kenyan tax paid on specific items like certain dividends, interest, royalties, and management fees.

• Kenya: Generally exempts income from sources within Germany that may be taxed there, but applies the rate that would have been applicable if the income had not been exempted. For income taxable in both States, Kenya allows a deduction for the German tax paid.