Kenya sets process for treaty and tax-in-error refunds

Who can use the process

The guidelines cover a non-resident claimant where tax has already been deducted and remitted to KRA, but Kenya is subsequently found not to have taxing rights under an in-force treaty or the payment was otherwise made in error. Examples include a treaty requiring a Kenyan permanent establishment when the non-resident has none, and excessive or incorrect withholding on dividends, interest, royalties or fees for technical services. Eligibility is not automatic: a treaty claimant must be resident in a treaty partner, satisfy the relevant treaty conditions and identify the article relied on. The amount must not already have been refunded, credited or otherwise settled, and the tax must not be the subject of a pending court, tribunal or competent-authority dispute. KRA may verify or audit the claim.^[1]

Application and review

The non-resident must write to KRA's Deputy Commissioner for Debt, Refunds and Ledger Management. The application must identify the claimant and Kenyan withholding agent, describe the income and tax deducted, state when tax was remitted, explain the treaty or other legal basis and specify the amount claimed. Supporting material includes a valid residence certificate, relevant treaty provisions, contracts, invoices, withholding certificates, proof of payment and evidence of remittance. KRA says it will check completeness within five days. Missing material is generally due within seven days of notification unless another period is communicated. Subject to complete information, KRA will conduct a technical review within 30 days, but may audit the claim. That review period is not a promise of payment within 30 days: section 47A imports the broader statutory refund machinery in section 47.^[1][2]

Settlement through the withholding agent

After approval, the non-resident asks the Kenyan withholding agent to cancel the relevant withholding-tax certificate in iTax. An approved cancellation generates a Withholding Adjustment Voucher, which the agent uses against eligible outstanding or future withholding-tax liabilities before refunding the non-resident. A dormant or winding-up agent unable to use the credit may request cash settlement instead. Both parties should retain evidence of settlement. Groups should identify Kenyan-source payments where tax was remitted despite a treaty restriction, preserve recipient-residence and transaction evidence, and coordinate the written claim with the Kenyan payer. The guidance does not change treaty entitlement, create a new ordinary withholding deadline or state a claim-submission limitation period specific to this route.^[1][2]