This document is the Double Taxation Relief (Kuwait) Notice, 2014, setting out the articles of an agreement between the Government of the Republic of Kenya and the Government of the State of Kuwait for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The agreement was signed on November 12, 2013, and the Notice was dated October 3, 2014.Taxes Covered (Article 2):

• The agreement applies to taxes on income and on capital.

• Kuwaiti taxes include the corporate income tax, the contribution to KFAS, the Zakat, and the tax subjected according to the supporting of national employee law.

• Kenyan tax is the income tax chargeable under the Income Tax Act, Cap. 470.

Key Income Articles and Withholding Tax Rates:

• Dividends (Article 10): May be taxed in the state of residency of the company paying the dividends, but the tax shall not exceed 5% of the gross amount if the beneficial owner is a resident of the other Contracting State.

• Interest (Article 11): May be taxed in the state where it arises, but the tax shall not exceed 10% of the gross amount if the recipient is the beneficial owner.

• Royalties (Article 12): May be taxed in the state where they arise, but the tax shall not exceed 10% of the gross amount if the beneficial owner is a resident of the other Contracting State.

Other Provisions:

• Permanent Establishment (Article 5): A building site or construction/installation project constitutes a permanent establishment only if it continues for more than 9 months. The furnishing of services constitutes a permanent establishment if the activities aggregate more than 6 months within any twelve-month period.

• Shipping and Air Transport (Article 13): Profits from operating ships or aircraft in international traffic and capital gains from their alienation are taxable only in the state where the place of effective management is situated.

• Income from Employment (Article 14): Generally taxable only in the state of residence unless the employment is exercised in the other state. An exemption applies if the recipient is present for less than 183 days, the remuneration is paid by a non-resident employer, and it is not borne by a permanent establishment in the other state.

• Elimination of Double Taxation (Article 23): Both Kuwait and Kenya employ the credit method.