Report On Consideration Of The Agreement Between Singapore And Kenya For The Elimination Of Double Taxation

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THIRTEENTHPARLIAMENT-FOURTHSESSION-2025 DEPARTMENTALCOMMITTEEONFINANCEANDNATIONAL PLANNING

REPORT ON:

THECONSIDERATIONOFTHEAGREEMENTBETWEENTHE GOVERNMENTOFTHEREPUBLICOFSINGAPOREANDTHE GOVERNMENTOFTHEREPUBLICOFKENYAFORTHEELIMINATION OFDOUBLETAXATIONWITHRESPECTTOTAXESONINCOMEAND THEPREVENTIONOFTAXEVASIONANDAVOIDANCE.

CLERK'SCHAMBERS DIRECTORATEOFDEPARTMENTALCOMMITTEES PARLIAMENTBUILDINGS NAIROBI.

NOVEMBER,2025

TableofContents

| LISTOFABBREVIATIONSANDACRONYMS | |-------------------------------------------------------------------------------------------------------------------------------------------------------------| | LISTOFANNEXURES | | CHAIRPERSON'SFOREWORD | | PARTI | | 1.0PREFACE | | I.IINTRODUCTION | | 1.2MANDATEOFTHECOMMITTEE | | I.3OVERSIGHT | | 1.4COMMITTEEMEMBERSHIP | | 1.5COMMITTEESECRETARIAT. | | PARTII 10 | | 2.0BACKGROUNDTOTHEAGREEMENT BETWEENTHEGOVERNMENTOFTHE THEELIMINATIONOFDOUBLETAXATIONWITHRESPECTTOTAXESONINCOMEAND THEPREVENTIONOFTAXEVASIONANDAVOIDANCE .10 | | PROVISIONSOFTHEAGREEMENT 11 | | PARTIII 17 | | 17 | | 3.ICALLFORMEMORANDAFROMTHEPUBLIC 17 | | PARTIV. 18 | | 4.0COMMITTEEOBSERVATIONS 18 | | PARTV 19 | | 5.0COMMITTEERECOMMENDATION 19 |

LISTOFABBREVIATIONSANDACRONYMS

MFA

Ministry of Foreign andDiasporaAffairs

MDAs

Ministries,Departments,and Agencies

UDA

United DemocraticAlliance

ODM

OrangeDemocraticMovement

LISTOFANNEXURES

• Annexure I: Adoption Schedule

• Annexure2:AdoptionMinutes

• Annexure 3:The agreementbetween the Government of the Republicof Singapore and the Government of the Republic of Kenya for the elimination of Double Taxationwithrespecttotaxesonincomeandthepreventionoftaxevasion andavoidance.

• Annexure 4: Copy of newspaper advertisement on public participation and submission ofmemoranda

• Annexure5:LetterfromtheClerkoftheNationalAssemblyinvitingStakeholdersfor public participation.

CHAIRPERSON'SFOREWORD

This report details the consideration by the Departmental Committee on Finance and National Planning on its consideration of the agreement between the Government of the RepublicofSingaporeand theGovernmentof theRepublicofKenya for theelimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance.

TheNational TreasuryandEconomicPlanning,onbehalfof theGovernmentofKenya, thesidelinesofthe79thSessionoftheUnitedNationsGeneralAssemblyinNewYork by the Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs on 23rd September, 2024 paving way for the ratification process. Subsequently, the Cabinet approved the ratification of the Agreement in the I"t Special Cabinet Meeting of on 2nd May, 2025 (Gazette Notice No. 5583 of 2025).

Secretary for Foreign and Diaspora Affairs submitted the Parliamentary Memorandum on Development to the Speaker of National Assembly, laid on the Table of the House and committedtotheCommitteeinlinewithStandingOrderI7oA(l).

The Agreement seeks to afford relief from double taxation in relation to income tax and any rates of similar character imposed by the laws of Kenya. The Agreement further seeks to further develop the economic relationship between Kenya and Singapore, enhance their co-operation in tax matters, sealing loopholes for non-taxation or reduced taxation atobtainingreliefsprovidedin thisAgreementfor theindirectbenefitofresidentsof third jurisdictions).The Agreement contains 30 Articles.

In considering the Treaty, the Committee pursuant to Article ll8(l)(b) of the submissions of memoranda on the subject matter.Further, the Committee,through a letterdated26thSeptember2025inviteddifferentstakeholderstomakesubmissions ontheagreement.

andtheGovernmentof theRepublicofKenyafortheeliminationofdoubletaxationwith Constitution, the Treaty Making and Ratification Act (Cap 4D) and Standing Order I70A

of the National Assembly Standing Orders, the Committee recommends that the House adopts this report and approves the ratification of the agreement between the Government of the Republic of Singapore and the Government of the Republic of Kenya for the elimination of double taxation with respect to taxes on income and the prevention oftaxevasionandavoidance.

Pursuant to Standing Orders 199(6) and 170A (4) it is my pleasant duty to present to the House the Report of the Departmental Committee on Finance and National Planning on its consideration of the agreement between the Government of the Republic of Singapore and theGovernment of theRepublicof Kenya for the eliminationof doubletaxationwith respect to taxes on income and theprevention of tax evasion and avoidance.

Hon.FCPA Kuria Kimani,CBS, M.P. Chairperson, Departmental Committee on Finance and National Planning.

1.0PREFACE

1.1 Introduction

• I.ThisreportoutlinestheconsiderationbytheDepartmentalCommitteeonFinance andNationalPlanningof the agreementbetween theGovernmentof theRepublicof Singapore and the Government of the Republic of Kenya for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance.

2. The National Treasury and Economic Planning, on behalf of the Government of Kenya, onthesidelinesofthe79thSessionof theUnitedNationsGeneralAssemblyinNew Yorkby thePrimeCabinetSecretaryandCabinetSecretaryforForeignandDiaspora Affairs on 23rd September, 2024 paving way for the ratification process. Subsequently, the Cabinet approved the ratification of the Agreement in the Ist Special Cabinet Meeting of 2025 held on IIth February, 2025. 3. The Agreement was published in the Kenya Gazette on 2nd May, 2025 (Gazette NoticeNo.5583of2025).

I.2MandateoftheCommittee

• 4.The Committee is established under the National Assembly Standing Order No. 216. The mandate of the Committee includes, among others, "to examine treaties, agreementsandconventions".
• 5.The Committee's subject matters are stated in the Second Schedule of the National AssemblyStanding Ordersandare asfollows:publicfinance,publicauditpolicies, monetary policies, financial institutions, economy, investment policies, competition, banking, insurance, national statistics, population, revenue policies including taxation, national planning, and development, digital finance, including digital currency.

1.3 Oversight

7. In executing its mandate, the Committee oversees the following MDAs: The National InvestmentandAssetManagement;TheOfficeoftheControllerofBudgetandThe CommissiononRevenueAllocation.

PARTI

1.4 Committee Membership

• 8.TheDepartmentalCommitteeonFinanceandNationalPlanningwasconstitutedby theHouseon27thOctober,2022andcomprisesthefollowingMembers:

Chairperson

Hon.CPA.KuriaKimani,CBS,MP Molo Constituency

UDA Party

Vice-Chairperson

Hon. Amb. Benjamin Langat, CBS, MP Ainamoi Constituency

UDA Party

Hon. Peter Kaluma, CBS, MP Homabay Town Constituency ODM Party

Hon Andrew Okuome,MP Karachuonyo Constituency ODMParty

Hon. David Mboni, MP Kitui Rural Constituency Wiper Party

Hon. CPA Joseph Oyula, MP Butula Constituency

ODM Party

Hon. Betty Maina, MP Muranga County UDA Party

Hon.Umul Ker Kassim,MP

Mandera County UDM Party

Hon. CPA Julius Rutto, MP Kesses Constituency UDA Party

Hon. Dr. Shadrack Ithinji, MP South Imenti Constituency

Jubilee Party

Hon. Paul Biego, MP Chesumei Constituency UDA Party

Hon.Chiforomondo Mangale,MP

Lungalunga Constituency UDM Party

Hon. Dr. John Ariko, MP Turkana South Constituency ODM Party

Hon.Mohamed Machele,MP Mvita Constituency ODM Party

Hon. George Sunkuya, MP KajiadoWest Constituency UDA Party

I.5 CommitteeSecretariat

9.The Committee is facilitated by the following staff:

Mr. Benjamin Magut

Principal Clerk Assistant II /Head of Secretariat

Mr. James M. Macharia

Mr. Mwangi Muchiri

Media Relations OfficerI

Audio Officer III

Ms.Winfred Kambua

Mr. George Ndenjeshe Fiscal Analyst II

Clerk Assistant III

Mr.Benson Kamande

Ms. Nelly W.N. Ondieki ResearchOfficerIll

Clerk Assistant III

Mr. Benson Muthuri Serjeant-At-Arms

Ms. Joyce Wachera HansardOfficerII

Mr. Steve Jeremy Kamau CommitteeIntern

Mr. Allan Kimani Ngugi CommitteeIntern

PART II

2.0BACKGROUNDTOTHEAGREEMENTBETWEEN THE GOVERNMENTOFTHE REPUBLIC OFSINGAPORE ANDTHE GOVERNMENTOFTHEREPUBLICOFKENYAFORTHEELIMINATION OFDOUBLETAXATIONWITHRESPECTTOTAXESONINCOMEAND THEPREVENTIONOFTAXEVASIONANDAVOIDANCE

• 10.The Committee received theAgreementBetween the Government of theRepublic of Singapore and the Government of theRepublicof Kenya for theElimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance.
• onthesidelinesofthe79thSessionoftheUnitedNationsGeneralAssemblyinNew YorkbythePrimeCabinetSecretary andCabinetSecretaryforForeignandDiaspora theCabinetapprovedtheratificationoftheAgreementintheIstSpecialCabinet Meeting of 2025held onIlthFebruary,2025.

12. The Agreement was published in the Kenya Gazette on 2nd May, 2025 (Gazette Notice No.5583of2025).

• I3.TheAgreementseeksto affordrelieffromdoubletaxationinrelationtoincometax further seeks to further develop the economic relationship between Kenya and Singapore, enhance their co-operation in tax matters, sealing loopholes for nontreaty-shopping arrangements aimed at obtaining reliefs provided in this Agreement for theindirect benefit of residents of third jurisdictions). The Agreement contains30 Articles.
• o effect to Article 2(6)of the Constitution and toprovide the procedure for the making andratificationoftreaties.Article2(6)provides that-

"Any treaty or convention ratified by Kenya shallform part of the law of Kenya under this Constitution."

• 15.Section7of theActprovidesthatwheretheGovernmentintendstoratify a treaty, theCabinetSecretaryof therelevantStatedepartmentshall,in consultationwith the Attorney-General,submittotheCabinetthetreaty,togetherwithamemorandum outliningseveral thingsincludingtheobjects andsubjectmatterof thetreaty.

PROVISIONSOFTHEAGREEMENT

16. The Agreement 30 articles.

Article I:Persons Covered

17. This article defines the scope of persons to whom the agreement applies. states.This ensures that only eligible taxpayers benefit from the double taxation relief. Article2:TaxesCovered 18. This article outlines the specific taxes subject to the agreement. It includes income taxes imposed by Kenya or Singapore and any future taxes of a similar nature. The agreement covers both current and future taxes,whetherimposed centrally or locally. Both countries must notify each other of significant changes to their tax laws.

Article3:GeneralDefinitions

• I9. This article provides essential definitions for interpreting the agreement. It "competent authority." These definitions ensure clarity and uniform application of the treaty.

Article4:Resident

20. This article determines residency for tax purposes. It establishes rules for resolvingdual residencyforindividuals(using tests likepermanenthome andcentre of vital interests) and legal entities (using effective place of management). In cases of ambiguity, competent authorities will resolve disputes through mutual agreement.

Article5:PermanentEstablishment

• 21.This article defines the concept of a permanent establishment (PE). It includes branches, offices, factories, and long-term construction sites. Certain activities, like storage or auxiliary services, do not create a PE. A PE allows the source country to tax profits from that establishment, ensuring fair distribution of taxing rights.

Article6:IncomefromImmovableProperty

Thisarticleaddressestaxationofincomefromimmovableproperty.Income like rent or earnings from agriculture may be taxed in the country where the property is located. Ships and aircraft are excluded from the definition of immovable property.

Article7:BusinessProfits

• 22.This article governs how business profits are taxed. Profits are taxed in the resident stateunless thebusiness has aPEin the other country.Onlyprofits attributable to the PE are taxed in the source country. Internal payments like royalties andinterestbetweenaheadofficeandPEarenotdeductibleexceptincertaincases.

Article 8:Shippingand AirTransport

23. This article assigns taxing rights for international transport income. Profits from operating ships or aircraftin international traffic are taxed only in the country where the operatoris resident.Thisincludesincidental container rentals.

Article9:AssociatedEnterprises

• 24.This article deals with taxationbetweenrelatedenterprises.Ifrelated companies transactonnon-arm'slengthterms,tax authoritiescanadjustprofitsto reflect market conditions. This discourages profit shifting and transfer pricing abuse. Doubletaxationarising fromsuchadjustmentsmayberelievedthroughmutual agreement.

Article10:Dividends

• 25.This articleregulatesthe taxationofdividendsbetweenresidentsofthe two states.Dividends may be taxed inboth states,but the source state's tax is capped at8%if thebeneficialowneris in the otherstate.Dividendspaidtogovernment revenue.

ArticleIl:Interest

• 26.Thisarticleaddressestaxationofinterestincome.Interestmaybetaxed in both countries, but the source country's tax is capped at Io% for beneficial owners. Government-related institutions are exempt. Excessive interest payments due to special relationships can be disregarded for tax purposes.

ArticleI2:Royalties

27. This article governs taxation of royalties. Royalties may be taxed in both countries, with a l0% cap in the source country. Royalties include payments for

intellectual property, software, and technical data.If the royalties are connected to a PE, they are taxed as businessprofits.

ArticleI3:TechnicalFees

28. This article regulates fees for technical services.Such fees may be taxed in both countries,subject to a lo% capin the source country.It includes managerial, consultancy, and professional services but excludes employee salaries and teaching. It ensurespropertaxationofhigh-valueknowledgeexports.

Article I4:Capital Gains

29. This article governs taxation of capital gains. Gains from immovable property andbusiness assetsof aPEmaybetaxedinthecountrywheretheassetislocated. Gains from ships and aircraft are taxed only in the resident country. Shares deriving most of their value from real estate may also be taxed at source.

ArticleI5:IncomefromEmployment

30. This article sets rules for taxing income from employment. Employment income is generally taxed in the country where the work is performed. Short stays (under I83 days) may be exempt if certain conditions are met.

ArticleI6:Directors'Fees

• 31.This article addressesthetaxation ofdirectors'fees.Such fees are taxed in the from board duties in foreign companies.

ArticleI7:Artistes andSportspersons

• 32.This article dealswithtaxationofentertainers and athletes.They are taxed in the country where their performance occurs, even if income goes to another party. If performances are funded by public entities, income is taxed only in the residence country.

ArticleI8:PensionsandSocialSecurityPayments

33. This article governs taxation of pensions. Private pensions are taxed in the country of residence. State or social security pensions are taxed only in the paying country.

Article I9:GovernmentService

• 34.This article sets rules for government-paid salaries and pensions. Such income is taxed in the paying state unless the recipient is a national and resident of theotherstate.Itensuresequitabletreatmentof civilservantsworking abroad.

Article20:ProfessorsandTeachers

35. This article grants tax exemption for short academic visits. Exemption applies for up to two years if the visit is for teaching or research at a public institution and the income ispaidfrom abroad.Thispromotes academic exchangeprograms.

Article2l:Students

36. This article grants tax exemption to foreign students. Maintenance and studentspursuingeducationintheothercontractingstate.

Article22:OtherIncome

• 37.Thisarticlecoversmiscellaneousincomenotaddressedelsewhere.Such incomeistaxedonlyintheresidentcountryunless itislinkedtoapermanent

Article23:EliminationofDoubleTaxation

• 38.Thisarticleensuresthatincomeisnottaxedtwice.Eachcountryallowstax credits for foreign tax paid, subject to limitations. For dividends, underlying corporate tax may also be credited incertaincases.This promotes cross-border investments andtaxneutrality.

Article24:Non-Discrimination

• 39.Thisarticleprohibitsdiscriminatorytaxtreatment.Nationalsandenterprises of one country must not be subjected to harsher taxation in the other. However, local tax incentives orpersonal reliefs may stillbe limited to residents.

Article25:Mutual AgreementProcedure

• 40.This articleprovides a mechanism for dispute resolution.Taxpayers may seek resolutionfromcompetent authorities if theyfaceunjust taxation.Authorities may

Article26:ExchangeofInformation

41. This article mandates exchange of tax-related information.Tax authorities must exchange relevant data, even if not needed for their own tax purposes.

Confidentialitymustbepreserved.Informationfrombanksandnomineesisnot exempt.

Article27:MembersofDiplomaticMissionsandConsularPosts

• 42.This article preserves diplomatic tax privileges. Diplomatic immunity is maintainedasperinternationallaw.ThetreatydoesnotoverrideVienna Convention protections.

Article28:EntitlementtoBenefits

43. This article limits treaty benefits in cases of abuse. lf obtaining the benefit was oneof themainpurposes ofa transaction,thebenefitmaybedenied.Thisprevents

Article29:EntryIntoForce

44. This article defines when the agreement becomes effective.The treaty takes effect once both countries complete their domestic procedures.It specifies the start dates for different taxes.This ensures coordinated andpredictable implementation.

Article 30:Termination

• 45.This article allows either country to terminate the agreement.Termination requires6months'noticeafter5yearsfromentryintoforce.Itoutlineshowthe termination affects existing taxrights depending on thetax type and timing.

Protocol

• 46.TheAgreementalsocontains aprotocol thatseeks toprovideclarityon threearticlesof the Agreement.TheseareArticle 4(Resident);Article9 (Associated Enterprises); Article 26 (Exchange of Information). These are elaborated below.

(a)Clarity onplaceofeffectivemanagement

• 47.WVith reference to paragraph 3 of Article 4 (Resident), the place of effective management is the place where key management and commercial decisions that are necessaryfortheconductof theentity'sbusinessas awholeareinsubstancemade.

(b)Associatedenterprises

• shall not change the profits of an enterprise in the circumstances referred to in paragraph I of Article 9 after the expiry of the time limits provided in its national laws. This provision shall not apply in the case of fraud or wilful default.

(c)Particularstoprovideonrequestforinformation

49. With reference to Article 26 (Exchange of Information), the competent authority of the applicantStateshallprovidethefollowinginformation to thecompetent authorityof therequestedStatewhenmakingarequestforinformationundertheAgreementto demonstratetheforeseeablerelevanceoftheinformationtotherequest 2. (b) a statement of the information sought including its nature, the relevance of the informationtotherequest,andtheforminwhich the applicantStatewishes to receivetheinformationfromtherequestedState; 3. (c) the taxpurposefor which theinformationis sought; 4. (d) grounds for believing that the information requested is held in the requested State or is in thepossession or control of aperson within the jurisdiction of therequestedState; 5. (e) to the extent known, the name and address of any person believed to be in possession of the requested information; 6. (f)astatementthattheapplicantStatehaspursuedallmeansavailableinitsown territory to obtain the information; 7. (g)astatementthattherequestisinconformitywiththelawandadministrative practices of the State of the competent authority, and that the competent authorityis authorisedtoobtain theinformationunderthelawsofthatState orinthenormal course ofadministrativepractice; 8. (h)thedetailsoftheperiodwithinwhichtheapplicantStatewishes therequestto bemet;and 9. (i) any other information that may assist in giving effect to the request.

PART III

3.0PUBLICPARTICIPATION/STAKEHOLDERCONSULTATION

3.ICallforMemorandafromthePublic

50. Pursuant to Article Il8(l)(b) of the Constitution on Public Participation and Section 8(3)of theTreaty Making and RatificationAct,20l2,theCommitteeplaced advertisements in the local dailies, on 3Ist July 2025 calling for submissions of memoranda on the subject matter. By the close of the deadline, the Committee receivednomemorandafromanystakeholder.

LEGALPROVISIONS

• 51.Pursuant to the Treaty Making and Ratification Act CAP 4D, the Cabinet Secretary submitted the treaty and a memorandum to the Speaker of the National Assembly on 27th May 2025.
• 52.Uponreceipt of theParliamentaryMemorandumby theNational Assembly,the relevantparliamentary committee duringitsconsideration of thetreatyisrequired to ensure there is public participation.

53. The National Assembly may approve or refuse to approve or approve with reservation the ratification of a treaty. 54. Where the ratification of a treaty is approved by the National Assembly, the Registry of Treaties prepares the instrument of ratification of the treaty. 55. The instrument is then signed, sealed, deposited at the relevant depositary, and a copy isfiledwiththeRegistrarofTreaties.

PARTIV

4.0COMMITTEEOBSERVATIONS

56. Having considered the Agreement and analyzed the submissions made, the Committee observedasfollows: 2. (a)The Agreement was signed on 23rd September, 2024 whereas the Cabinet approved theratification of theAgreement on IIthFebruary, 2025. The Agreementwas published in the Kenya Gazette on 2nd May, 2025(GazetteNotice No.5583of2025). 3. (b)TheAgreementseeks toafford relieffromdoubletaxation inrelation toincometaxandanyratesofsimilarcharacterimposedbythelawsof Kenya.The Agreement further seeks to further develop the economic relationship between Kenya and Singapore, enhance their co-operation in tax matters,sealing loopholes for non-taxation or reduced taxation arrangementsaimedatobtainingreliefsprovidedinthisAgreementfor the indirectbenefit of residents of third jurisdictions). 4. (c) The Agreement is aligned to the Constitution.

PARTV

5.0COMMITTEERECOMMENDATION

• 57.The Committee, having reviewed the Agreement recommends that pursuant to section 8 of the Treaty-Making and Ratification Act, Cap. 4D, the House adopts and approves the Agreement between the Government of the Republicof Singapore and the Governmentof the Republic of Kenya for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance.

ec...20zf

SIGNED:.

.DATE:..

THE HON FCPA KURIA KIMANI,CBS,M.P. CHAIRPERSON,DEPARTMENTALCOMMITTEEONFINANCEAND NATIONALPLANNING

DATE:

0 2 DEC 2025

THENATIONALASSEMBLY THIRTEENTHPARLIAMENT-FOURTHSESSION-2025

DEPARTMENTALCOMMITTEEONFINANCEANDNATIONALPLANNING. ADOPTIONLIST

REPORTONTHEAGREEMENTBETWEENTHEGOVERNMENTSOFTHE

REPUBLICOFKENYAANDTHEREPUBLICOFSINGAPOREFORTHEELIMINATION ANDAVOIDANCE.

We, the Members of the Departmental Committee on Finance and National Planning have pursuant to Standing Order 199, adopted this Report and affix our signatures to affirm our approval and confirm its accuracy, validity and authenticity today, Tuesday, 25th November, 2025.

| S/NO. | NAME | SIGNATURE | |---------|---------------------------------------------------------|-------------| | 1. | HON. (CPA). KURIA KIMANI, MP - CHAIRPERSON | | | 2. | HON.(AMB). BENJAMIN KIPKIRUI LANGAT, MP-VICECHAIRPERSON | | | 3. | HON.KALUMAPETEROPONDO,MP | | | 4. | HON.GEORGESUNKUYIARISA,MP | | | 5. | HON. (CPA)JOSEPH MAERO OYULA, MP | | | 6. | HON.ANDREWADIPOOKUOME,MP | | | 7. | HON.DAVIDMWALIKAMBONI,MP | | | 8. | HON.CHIFOROMODOMANGALEMUNGA,MP | | | 9. | HON.MAINA BETTY NJERI,MP | | | 10. | HON. (CPA) JULIUS KIPLETTING RUTTO, MP | | | 11. | HON.PAULKIBICHIY BIEGO, MP | | | 12. | HON. UMUL KER SHEIKH KASSIM, MP | | | 13. | HON.DR.SHADRACKMWITIITHINJI,MP | | | 14. | HON.DR.JOHNARIKONAMOIT,MP | | | 15. | HON.MOHAMEDSOUDMACHELE,MP | |