McKinsey and Company Inc Africa Proprietary Ltd v Commissioner of Legal Services and Board Cordination (Appeal 199 of 2020) [2021] KETAT 137 (KLR) (1 April 2021) (Judgment)
- Court
- Tax Appeals Tribunal
- Case number
- 137
- Citation
- [2021] KETAT 137 (KLR)
- Decided
- 1 April 2021
The Tribunal finds that the income is not subject to Withholding Tax under Article 7 of the DTA and sets aside the Objection Decision.
Facts
The Appellant, McKinsey and Company Inc. Africa Proprietary Ltd, paid professional fees to its related party resident in South Africa. The Respondent, Commissioner of Legal Services and Board Coordination, demanded Withholding Tax on the fees under the Kenya-South Africa Double Taxation Agreement (DTA).
Issues
- Whether the Respondent erred in demanding Withholding Tax from the Appellant in respect of professional fees paid to its related party resident in South Africa.
- How the income is treated under the provisions of the Kenya-South Africa DTA.
Reasoning
The Tribunal interprets the Kenya-South Africa DTA, relying on the UN and OECD Models and the Vienna Convention on Interpretation of Treaties, to conclude that the income is not specifically captured under the DTA and thus is not subject to Withholding Tax.
Outcome
The Appeal has merit and the Tribunal sets aside the Objection Decision.
Orders
- The Objection Decision dated 6th April, 2020 is hereby set aside.
- No orders as to cost.
Authorities cited
Legislation (2)
- Kenya-South Africa Double Taxation Agreement
- Kenya Revenue Authority Act, Cap 469 of the Laws of Kenya
Loading judgment…