This document is a Convention between the Government of the Republic of Kenya and the Government of the Republic of South Korea for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.Taxes Covered:The Convention applies to taxes on income imposed by a Contracting State or its political subdivisions or local authorities. The existing taxes covered are:

• In Korea ("Korean tax"): The income tax, corporation tax, special tax for rural development, and local income tax.

• In Kenya ("Kenyan tax"): The income tax chargeable in accordance with the provisions of the Income Tax Act, Cap. 470.

  It also applies to any identical or substantially similar taxes imposed after the date of signature.

Taxation of Specific Income:

• Dividends (Article 10): May be taxed in the state of residence of the company paying them, but the tax is limited if the beneficial owner is a resident of the other State. The maximum tax rate is:

  • 8% of the gross amount if the beneficial owner is a company (other than a partnership) holding directly at least 25% of the capital.

  • 10% of the gross amount in all other cases.

• Interest (Article 11): May be taxed in the state where it arises, but the tax cannot exceed 12% of the gross amount if the beneficial owner is a resident of the other State. Interest is exempt from tax in the state where it arises if it is beneficially owned by or paid to the Government, a political subdivision, a local authority, or the Central Bank of the other Contracting State, or any institution wholly owned by them.

• Royalties (Article 12): May be taxed in the state where they arise, but the tax cannot exceed 10% of the gross amount if the beneficial owner is a resident of the other State. The term "royalties" includes payments for the use of or right to use copyrights, patents, trademarks, secret formulas, and information concerning industrial, commercial, or scientific experience.

• Business Profits (Article 7): Taxable only in a Contracting State unless the enterprise carries on business in the other State through a permanent establishment. A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months.

Competent Authorities:

• In Korea: The Minister of Strategy and Finance or his authorised representative.

• In Kenya: The Cabinet Secretary responsible for matters relating to Finance or his authorised representative.