COMMISSIONER OF INCOME TAX v MABATI ROLLING MILLS LIMITED [2012] KEHC 2005 (KLR)
- Court
- High Court of Kenya
- Case number
- 2005
- Citation
- [2012] KEHC 2005 (KLR)
- Decided
- 1 October 2012
The Court of Appeal dismisses the appeals and upholds the decision of the Local Committee, finding that the interest was not chargeable to tax and thus not subject to withholding tax.
Facts
The respondent, Mabati Rolling Mills Limited, was assessed tax for years 1996 to 2001 for withholding tax on interest payments made to non-resident companies. The respondent appealed to the Local Committee, which found that the interest was not chargeable to tax due to the activities being outside Kenya.
Issues
- Whether the respondent was obliged to withhold withholding tax on interest payments
- Whether the Local Committee's decision was in accordance with the Income Tax Act
Reasoning
The contract was entered into and goods were sold in Japan, and the interest was derived from that location. The Court of Appeal agrees with the decision of the Local Committee that the interest was not chargeable to tax and thus not subject to withholding tax.
Outcome
Appeals dismissed
Orders
- Appeals dismissed with costs to the respondent
Authorities cited
Legislation (2)
- Income Tax Act
- Income Tax (Appeals to the High Court) Rules
Cases cited (2)
- ESSO STANDARD EASTERN INC. vs. INCOME TAX
- COMMISSIONER OF INCOME TAX vs. P. CO. LTD.
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