This document is the 1968 Income Tax Convention between the Government of the Republic of Zambia and the Government of the Republic of Kenya for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income.Key Details and Scope:

• Treaty Partners: Kenya and Zambia.

• Signed: August 27, 1968.

• Effective Dates: In Kenya, from January 1, 1964; in Zambia, from April 1, 1964.

• Status: In Force.

• Taxes Covered:

  • Zambian tax includes income tax, supertax, undistributed profits tax, and the personal levy.

  • Kenyan tax includes income tax, corporation tax, undistributed income tax, and the graduated personal tax.

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

Key Provisions:

• Permanent Establishment (PE): PE means a fixed place of business and specifically includes a place of management, a branch, an office, a factory, a workshop, a mine, a quarry, a farm, or a building site existing for more than six months. Certain activities like storage, display, or delivery of goods are not deemed a PE.

• Industrial and Commercial Profits: Taxable only in the enterprise's Contracting State unless business is carried on through a PE in the other state.

• Shipping and Aircraft: Income or profits from the operation of ships or aircraft derived by a resident of one Contracting State are exempt from tax in the other, unless the operation is wholly or mainly between places within that other state. Income or profits from the operation of ships, aircraft, or railways by a government, local authority, or statutory corporation are exempt in the other state.

• Dividends: Dividends paid by a company resident in one state to a resident of the other state who is subject to tax in the latter state, are exempt from any additional tax on dividends in the company's state of residence.

• Royalties and Rent: Generally exempt from tax in the first-mentioned state if subject to tax in the other state where the use occurs.

• Interest: Interest from a source in one state derived by a resident of the other state is exempt from tax in the recipient's state, unless it is not subject to tax in the source state.

• Elimination of Double Taxation: The Convention provides for tax paid in the other Contracting State to be allowed as a deduction (credit) from the tax on the income in the resident's state.