Singapore and Kenya have formally established a new bilateral tax framework with the signing of an Agreement for the Avoidance of Double Taxation and the Prevention of Tax Evasion with respect to Taxes on Income (DTA). The agreement was signed on September 23, 2024.
Key Implications:
- Replacement of Prior Agreement: This newly signed DTA explicitly terminates the previous double taxation agreement between the two nations, which was signed on 12 June 2018. Notably, the 2018 agreement never entered into force due to non-ratification.
- Next Steps: The new DTA will become legally binding and operational only after both Singapore and Kenya complete their respective domestic ratification processes. The timeline for entry into force depends on these internal procedures.
- Document Availability: The full text of the newly signed agreement is now accessible to the public on the website of the Inland Revenue Authority of Singapore (IRAS).
Purpose of the DTA:
The agreement aims to:
- Eliminate double taxation of income earned by residents of one country in the other country.
- Provide greater certainty of tax treatment for cross-border trade and investment.
- Prevent fiscal evasion through enhanced cooperation between the tax authorities of Singapore and Kenya.
- Foster closer economic ties by reducing tax barriers.
Source: MOF, 24 September 2024.