This document is the Convention between the Government of the Republic of Kenya and the Government of the Kingdom of Sweden for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital. It was signed at Nairobi on June 28, 1973.Taxes Covered:

• In Kenya: Income tax and the graduated personal tax.

• In Sweden: The State income tax (including sailors tax and coupon tax), the tax on the undistributed profits of companies, the tax on public entertainers, the communal income tax, and the State capital tax.

• The Convention also applies to substantially similar taxes imposed afterward.

Taxation of Income/Profits:

• Business Profits (Article IV): Profits of an enterprise in one Contracting State are only taxable in the other State if the enterprise carries on business through a permanent establishment situated therein.

• Permanent Establishment (Article V): Generally means a fixed place of business. It includes a place of management, a branch, an office, a factory, a workshop, a mine, a farm, a building site existing for more than six months, and supervisory activities on such a site for more than six months.

• Dividends (Article VIII): May be taxed in the State of the company paying them, but the tax is capped at 15% if the recipient company owns at least 25% of the voting shares, and 25% in all other cases.

• Interest (Article IX): May be taxed in the State in which it arises, but the tax is capped at 15% of the gross amount. Interest paid to the Government, Central Bank, or wholly-owned agency of the other State is exempt.

• Royalties (Article X): May be taxed in the State in which they arise, but the tax is capped at 20% of the gross amount.

• Management or Professional Fees (Article XI): May be taxed in the State in which they arise, but the tax is capped at 20% of the gross amount.

Entry into Force and Termination:

• The Convention enters into force upon the exchange of notifications that all necessary things have been done to give it the force of law in both States.

• It is effective in respect of Kenyan tax for any year of income beginning on or after January 1973.

• It continues indefinitely but may be terminated by written notice on or before the thirtieth day of June in any calendar year beginning after the expiration of five years from its entry into force.