The document summarizes the key provisions of the Double Taxation Avoidance Agreement (DTAA) and Investment Promotion Agreement (IPPA) between Mauritius and Kenya. The DTAA will take effect from January 2015 and provides benefits for Mauritius companies investing in Kenya, including tax credits and exempting capital gains tax on the sale of shares of a Kenyan company. The IPPA aims to encourage and protect investments between the two countries.

1. 23 June 2014
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DTAA and IPPA between Mauritius and Kenya
1. Double Taxation Avoidance Agreement
DTAA between Mauritius and Kenya with respect to entry into force, the provisions of the treaty
will take effect on or after the first day of January 2015.
The advantages of Using Mauritius Company for Investments in Kenya:
A resident of Mauritius derives income or gains from Kenya, the amount of tax on that income or
gains payable in Kenya may be credited against the Mauritius tax. Further, a company resident in
Kenya pays dividend to a resident of Mauritius who controls directly or indirectly at least 5% of
the company paying the dividend, credit shall take into account the underlying tax paid by the
Kenyan company on the profits out of which dividend was paid.
In case of exit from the Kenyan investment, gains arising on the disposal of the shares by the
Mauritius Company will be taxable only in Mauritius by virtue of the DTAA. There is no capital
gains tax in Mauritius. It should be highlighted that the provision applies irrespective of what
constitute the assets of the Kenyan company.
Under the treaty, the rate is reduced to 5% if the Mauritius company owns more than 10% of the
share capital of the Kenyan company. Usually, Dividend paid by a Kenyan company to a non
resident is subject to a withholding tax of 10%.
Summarized DTAA between Mauritius and Kenya
Income
Withholding tax rate (WHT)
under DTAA
WHT in
Mauritius
WHT in
Kenya
Dividend 10%(1) 15%(2) 15%
Interest 5%/10%(1) Nil 10%
Royalties 10% 10%/15%(3) 20%
Capital gains on disposal
of shares
Taxed only in the resident state Nil 20%
(1) 5% applies where beneficial owner owns at least 10% of the company paying out the
dividends/10% applies in all other cases.
(2) Applicable on payment to non residents/No WHT where payment is being made from a Global
Business Company
(3) 10% on payments to resident/15% on payments to non-residents/No WHT where payment is
being made from a Global Business Company
Further the Mauritius – Kenya DTAA provides for tax sparing credit and this will not dilute any
incentive that has been given in Kenya. Other articles which follow the OECD model are in
respect of Mutual Agreement Procedure, Assistance for Collection of Taxes and Exchange of
Information articles.
2. Investment Promotion Agreement between Mauritius and Kenya (‘IPPA’)
An Investment Promotion Agreement has also been ratified between Mauritius and Kenya.

2. The objective of the Investment Promotion Agreement is to encourage and protect investments
between the two countries.
The date the IPPA will start being effective is yet to be specified by the Minister.
Intuit Research Team
Intuit Management Consultancy
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