a Fellow of the Institute of Actuaries in England; or of the Faculty of Actuaries in Scotland; or of the Society of Actuaries in the United States of America; or of the Canadian Institute of Actuaries; or

such other person having actuarial knowledge as the Commissioner of Insurance may approve;

manufactured for the carriage of goods and so used in connection with a trade or business; or

a motor omnibus within the meaning of that term in the Traffic Act (Cap. 403); or

used for the carriage of members of the public for hire or reward;

the Commissioner-General appointed under section 11(1) of the Kenya Revenue Authority Act (Cap. 469); or

with respect to powers or functions that have been delegated under section 11(4) of the Kenya Revenue Authority Act (Cap. 469) to another Commissioner, that other Commissioner;

that the person, directly or indirectly, holds at least twenty per cent of the voting rights in a company;

a loan advanced by the person to another person constitutes at least seventy per cent of the book value of the total assets of the other person excluding a loan from a financial institution that is not associated with the person advancing the loan;

a guarantee by the person for any form of indebtedness of another person constitutes at least seventy per cent of the total indebtedness of the other person excluding a guarantee from a financial institution that is not associated with the guarantor;

the person appoints more than half of the board of directors of another person or at least one director or executive member of the governing board of that person;

the person is the owner of or has the exclusive rights over the know-how, patent, copyright, trade mark, licence, franchise or any other business or commercial right of a similar nature, on which another person is wholly dependent for the manufacture or processing of goods or articles or business carried on by the other person;

the person has any other relationship, dealing or practice with another person which the Commissioner may deem to constitute control;

which provide for a separate account to be maintained in respect of each member, to which are credited contributions made to the fund by, or in respect of, the member and any other amounts allocated to the member, and to which are charged payments in respect of the member; and

under which the only benefits in respect of a member are benefits determined solely with reference to, and provided by, the amount of the member’s account;

in relation to a body corporate the affairs of which are managed by a board of directors or similar body, a member of that board or similar body;

in relation to a body corporate the affairs of which are managed by a single director or similar person, that director or person;

in relation to a body corporate the affairs of which are managed by the members themselves, a member of the body corporate,

in relation to a member of a registered pension or provident fund or of an individual eligible to contribute to a registered individual retirement fund, the employment income specified in section 3(2)(a)(ii) subjected to deduction of tax under section 37;

in the case of an individual eligible to contribute to a registered individual retirement fund, the gains or profits from business subject to tax under section 3(2)(a)(i) earned as the sole proprietor or as a partner of the business:

a fixed place of business through which business is wholly or partly carried on and includes a place of management, a branch, an office, a factory, a workshop, a mine, an oil or gas well, a quarry or any other place of extraction or exploitation of natural resources, a warehouse in relation to a person whose business is providing storage facilities to others, a farm, plantation or other place where agricultural, forestry plantation or related activities are carried on and a sales outlet;

the provision of services, including consultancy services, by a person through employees or other personnel engaged for that purpose, but only where the services or connected business in Kenya, continue for a period of, or periods exceeding in the aggregate, ninety-one days in any twelve-month period commencing or ending in the year of income concerned;

an installation or structure used in the exploration for natural resources:

Provided that the exploration continues for a period of not less than ninety-one days;

a dependent agent of a person who acts on their behalf in respect of any activities which that person undertakes in Kenya including habitually concluding contracts, or playing the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the person,

the personal relief provided for under Part V; and

the relief mentioned in section 30;

interest earned on an account held jointly by a husband and wife shall be deemed to be qualifying interest; and

in the case of housing bonds, the aggregate amount of interest shall not exceed three hundred thousand shillings.

any copyright of a literary, artistic or scientific work; or

any cinematograph film, including film or tape for radio or television broadcasting; or

any patent, trade mark, design or model, plan, formula or process; or

any industrial, commercial or scientific equipment,

a pre-primary, primary, or secondary school;

a technical college or university;

an institution established for the promotion of adult education, vocational training or technical education.

a partnership in which her husband is a partner;

her husband; or

a company, the voting power of which is held to the extent of twelve and one-half per cent or more at any time during the year of income by her or by her husband or by both jointly, either directly or through nominees;

dividends or interest;

income accruing from a business carried out over the internet or an electronic network including through a digital marketplace;

deleted by Act No. 14 of 1982, s. 17;

an amount deemed to be the income of any person under this Act or by rules made under this Act;

gains accruing in the circumstances prescribed in, and computed in accordance with, the Eighth Schedule;

subject to section 15(5A), the net gain derived on the disposal of an interest in a person, if the interest derives twenty per cent or more of its value, directly or indirectly, from immovable property in Kenya;

a natural resource income; and

gains from financial derivatives, excluding financial derivatives traded at the Nairobi Securities Exchange.

"person" does not include a partnership;

a bonus or interest paid by a designated cooperative society, as defined under section 19A, shall be deemed to be a dividend;

"digital marketplace" means an online or electronic platform which enables users to sell or provide services, goods or other property to other users;

a person who is, or was at the time of the employment or when the services were rendered, a resident person in respect of any employment or services rendered by him in Kenya or outside Kenya; or

a non-resident person in respect of any employment with or services rendered to an employer who is resident in Kenya or the permanent establishment in Kenya of an employer who is not so resident,

save as otherwise expressly provided in this section, the value of a benefit, advantage, or facility of whatsoever nature the aggregate value whereof is not less than thirty six thousand shillings granted in respect of employment or services rendered;

any balancing charge under Part II of the Second Schedule;

the value of premises provided by an employer for occupation by his employee for residential purposes;

deleted by Act No. 6 of 1994, s. 34.

For the purposes of this subsection—

such value as the Commissioner may, from time to time, determine; and

in the 1996 year of income, 1% of the initial capital expenditure on the vehicle by the employer;

in the 1997 year of income, 1.5% of the initial capital expenditure on the vehicle by the employer; and

in 1998 and subsequent years of income, 2% of the initial expenditure on the vehicle by the employer.

in the case of a director of a company, other than a whole time service director, an amount equal to the higher of fifteen per centum of his total income excluding the value of those premises and income which is chargeable under section 3(2)(f), the market rental value and the rent paid by the employer;

in the case of a whole time service director, an amount equal to the higher of fifteen per centum of the gains or profits from his employment, excluding the value of those premises, and income which is chargeable under section 3(2)(f), the market rental value and the rent paid by the employer;

the expenditure on passages between Kenya and any place outside Kenya borne by employer:

Provided that this paragraph shall not apply to expenditure other than expenditure on the provision of passages for the benefit of an employee recruited or engaged outside Kenya and who is in Kenya solely for the purpose of serving the employer and is not a citizen of Kenya;

in the case of a full-time employee or his beneficiaries (which expression includes a whole time service director, or a director who controls more than five per cent of the share capital or voting power of a company) the value of any medical services provided by the employer or medical insurance provided by an insurance provider approved by the Commissioner of Insurance and paid for by the employer on behalf of a full-time employee or his beneficiaries:

Provided that in the case of a director other than a whole time service director, the value of the services shall be subject to such limit as the Cabinet Secretary may, from time to time, prescribe;

educational fees of employee’s dependants or relatives disallowed under section 16(2(a)(iv) which have been taxed in the hands of the employer;

fringe benefits subject to tax under section 12B;

the value of meals served to employees in a canteen or cafeteria operated or established by the employer or provided by a third party who is a registered taxpayer (whether the meals are supplied in the premises of the employer or the premises of the third party) where the value of the meal does not exceed the sum of forty-eight thousand shillings per year per employee subject to such conditions as the Commissioner may specify;

an amount paid by an employer as a gratuity or similar payment in respect of employment or services rendered, which is paid into a registered pension scheme:

Provided that—

in the case of an employee share ownership plan, the value of the benefit shall be the difference between the offer price, per share, at the date the option is granted by the employer, and the market value, per share on the date when the employee exercises the option;

the Commissioner may, from time to time, prescribe the value where the cost or the fair market value of a benefit cannot be determined.

the benefits chargeable shall be deemed to have accrued on the date the employee exercises the option;

"offer price" means the price at which an employer’s shares are initially offered to an employee under an employee share ownership plan;

"share option" means the offer made by an employer to an employee to purchase a fixed number of shares at a fixed price, which may be paid for at the end of the vesting period;

"vesting period" means a fixed period of time between the date of offer by the employer and the date after which the option to purchase can be exercised by the employee.

a dividend paid by a resident company shall be deemed to be income of the year of income in which it was payable;

if received by a resident individual; or

if received by a non-resident individual if the person making payment of the pension was resident in Kenya.

in the case of a lump sum commuted from a registered pension or individual retirement fund, the first six hundred thousand shillings; or

in the case of a benefit paid out of the National Social Security Fund, the first six hundred thousand shillings; and

in the case of a lump sum paid out of a registered home ownership savings plan, the amount used for the purchase of an interest in or for the construction of a permanent house for occupation by the depositor within twelve months immediately following the year of withdrawal;

the accumulated funds based on contributions prior to the 1^st January 1991 are accounted for separately from contributions after 31^st December, 1990; and

the net accumulated funds on each account earn the average rate of return on all the assets in the fund at the accounting date for a year of income; and

the net accumulated funds based on contributions prior to 1^st January, 1991, are made up of the accumulated balances as at 31^st December, 1990, less any withdrawals from the fund plus any investment income earned on the fund up to the accounting date for a year of income.

the widow, widower or dependants shall qualify as a group for the same tax exempt amounts out of pension income and lump sums as are available under subsections (4) and (5) respectively as if such amounts had been received by the employee; and

where the registered fund provides for no payment of retirement benefits other than the payment of a lump sum to an estate, the first one million four hundred thousand shillings of such a lump sum payment shall be deemed to be income not chargeable to tax as income of the estate or its direct beneficiaries.

where such funds have been bequeathed to the spouse, the ownership of the fund may be transferred to the spouse; or

where funds are bequeathed to his children under the age of eighteen years at the time of his death, such funds shall be included in the income of such children;

where the funds of a depositor under a registered home ownership savings plan are bequeathed to another depositor, the funds may be transferred to that depositor.

pension and lumpsums paid from a public pension scheme, shall be deemed to be received from a registered pension fund or a registered provident fund, as the case may be;

any surplus funds in respect of a registered pension fund or a registered provident fund withdrawn by or refunded to an employer shall be deemed to be the income of that employer.

a management or professional fee or training fee;

a royalty or natural resource income;

interest and deemed interest;

the use of property;

an appearance at, or performance in, any place (whether public or private) for the purpose of entertaining, instructing, taking part in any sporting event or otherwise diverting an audience; or

an activity by way of supporting, assisting or arranging an appearance or performance referred to in paragraph (e) of this section;

winnings;

deleted by Act No. 16 of 2014, s. 6(b);

deleted by Act No. 23 of 2019, s. 6(a);

an insurance or reinsurance premium.

sales promotion, marketing, advertising services, and transportation of goods (excluding air and shipping transport services;

in the case of an annuity directed to be paid free of tax, of such gross amount as is equal to the amount of such annuity together with the amount of the sums paid by the trustee to the annuitant to meet the liability of the annuitant to tax on such annuity.

any amount that is paid out of the trust income on behalf of any beneficiary and is used exclusively for the purpose of education, medical treatment or early adulthood housing;

income paid to any beneficiary which is collectively below ten million shillings in the year of income;

such other amount as the Commissioner may prescribe from time to time and at such rate as prescribed in paragraph 5 of the Third Schedule.

if the minimum tax payable under section 12D is higher than the instalment tax under this section; and

if he has reasonable ground to believe that the whole of the tax payable by him in respect of those emoluments will be recovered under section 37.

the amount equal to the tax that would be payable by that person if his total income for the current year was an amount equal to his instalment income; or

the amount specified in the preceding year assessment multiplied by one hundred and ten per cent.

rental income;

management or professional or training fees; or

Deleted by Act No. 2 of 2020, Sch;

any income which is subject to a final withholding tax under this Act.

that person's income is not exempt under this Act;

that person's income is not chargeable to tax under sections 5, 6A, 12C, the Eighth or the Ninth Schedules; or

the instalment tax payable by that person under section 12 is lower than the minimum tax.

Deleted by Act No. 8 of 2021, s. 6(a).

Deleted by Act No. 8 of 2021, s. 6(a).

is engaged in business whose retail price is controlled by the Government;

is engaged in insurance business;

is engaged in manufacturing and that person's cumulative investment in the preceding four years from assent is at least ten billion shillings;

is licensed under the Special Economic Zones Act (Cap. 517A); and

is engaged in distribution business whose income is wholly based on a commission.

that any income or class of income which accrued in or was derived from Kenya shall be exempt from tax to the extent specified in such notice;

that any exemption under subsection (1) of this section shall cease to have effect either generally or to the extent specified in the notice.

bad debts incurred in the production of such gains or profits which the Commissioner considers to have become bad, and doubtful debts so incurred to the extent that they are estimated to the satisfaction of the Commissioner to have become bad, during such year of income and the Commissioner may prescribe such guidelines as may be appropriate for the purposes of determining bad debts under this subparagraph;

amounts to be deducted under the Second Schedule in respect of that year of income;

amounts to be deducted under the Ninth Schedule in respect of that year of income;

any expenditure of a capital nature incurred during that year of income by the owner or occupier of farm land for the prevention of soil erosion;

any expenditure of a capital nature incurred in that year of income by any person on legal costs and stamp duties in connexion with the acquisition of a lease, for a period not in excess of, or expressly capable of extension beyond, ninety-nine years, of premises used or to be used by him for the purposes of his business;

any expenditure, other than expenditure referred to in paragraph (f) of this section, incurred in connection with any business before the date of commencement of that business where such expenditure would have been deductible under this section if incurred after such date, so, however, that the expenditure shall be deemed to have been incurred on the date on which such business commenced;

in the case of the owner of premises, any sums expended by him during such year of income for structural alterations to the premises where such expenditure is necessary to maintain the existing rent:

Provided that no deduction shall be made for the cost of an extension to, or replacement of, such premises;

the amount considered by the Commissioner to be just and reasonable as representing the diminution in value of any implement, utensil or similar article, not being machinery or plant in respect of which a deduction may be made under the Second Schedule, employed in the production of gains or profits;

Deleted by Act No. 8 of 2020, s. 5;

in the case of gains or profits from the sale of standing timber by a person who has purchased the right to fell such timber, so much of the price paid for such right as the Commissioner may determine to be just and reasonable as attributable to the timber sold during such year of income;

Deleted by Act No. 8 of 1997, s. 32;

any expenditure of a capital nature incurred in such year of income by the owner or tenant of any agricultural land, on clearing such land, or on clearing and planting thereon permanent or semi-permanent crops;

Deleted by Act No. 16 of 2014, s. 7(a);

any sum contributed in such year of income by an employer to a national provident fund or other retirement benefits scheme established for employees throughout Kenya by the provisions of any written law;

any expenditure on advertising in connexion with any business to the extent that the Commissioner considers just and reasonable; and for this purpose "expenditure on advertising" includes any expenditure intended to advertise or promote, whether directly or indirectly, the sale of the goods or services provided by that business;

Deleted by Act No. 13 of 1984, s. 19;

Deleted by Act No. 8 of 2020, s. 5;

Deleted by Act No. 8 of 2020, s. 5;

expenditure incurred by the lessee in the case of a lease or similar transaction as determined in accordance with such rules as may be prescribed under this Act;

Deleted by Act No. 8 of 2020, s. 5.

Deleted by Act No. 8 of 2020, s. 5.

any donation in that year of income to a charitable organization whose income is exempt from tax under paragraph 10 of the First Schedule to this Act, or to any project approved by the Cabinet Secretary responsible for matters relating to finance;

expenditure of a capital nature incurred in that year of income, with the prior approval of the Cabinet Secretary, by a person on the construction of a public school, hospital, road or any similar kind of social infrastructure;

deleted by Act No. 22 of 2022, s. 8.

expenditure incurred in that year of income by a person sponsoring sports, with the prior approval of the Cabinet Secretary responsible for sports;

expenditure incurred in that year of income on donations to the Kenya Red Cross, county governments or any other institution responsible for the management of national disasters to alleviate the effects of a national disaster declared by the President.

deleted by Act No. 2 of 2020, Sch.

deleted by Act No. 14 of 1982, s. 19;

in the case of a partner, the amount of the excess, if any, of his share of any loss incurred by the partnership, calculated after deducting the total of any remuneration and interest on capital payable to any partner by the partnership and after adding any interest on capital payable by any partner to the partnership, over the sum of any remuneration and such interest so payable to him less any such interest so payable by him;

deleted by Act No. 8 of 1978, s. 9;

the amount of any loss realized in computing, in accordance with paragraph 5(2), of the Eighth Schedule, gains chargeable to tax under section 3(2)(f); but the amount of any such loss incurred in a year of income shall be deducted only from gains under section 3(2)(f) in that year of income and, in so far as it has not already been deducted, from gains in subsequent years of income;

in the case of a business which is a sole proprietorship, the cost of medical expenses or medical insurance cover incurred for the benefit of the proprietor, subject to a limit of one million shillings per year.

A person to whom this subsection applies who has succeeded to any business, or to a share therein, either as a beneficiary under the will or on the intestacy of a deceased person who carried on, solely or in partnership, that business shall be entitled to a deduction in the year of income in which he so succeeds in respect of such part of any deficit in the total income of the deceased for his last year of income as is attributable to any losses incurred by the deceased in the business in that year of income or in earlier years of income.

This subsection applies to a person who is the widow, widower or child, of the deceased person and to a person who was an employee or partner of the deceased person in that business; and, where there are two or more such persons, each such person shall be entitled to a deduction of so much of the whole amount deductible as his share in the business under the will or on the intestacy bears to the sum of the shares of all such persons.

deleted by Act No. 14 of 2015, s. 10(c)(i);

the amount computed according to the following formula—

expenditure of a capital nature on scientific research does not include any expenditure incurred in the acquisition of rights in, or arising out of scientific research but, subject thereto, does include all expenditure incurred for the prosecution of, or the provision of facilities for the prosecution of, scientific research.

the gains or profits of a person derived from any one of the seven sources of income respectively specified in paragraph (e) of this subsection (and in this subsection called "specified sources") shall be computed separately from the gains or profits of that person derived from any other of the specified sources and separately from any other income of that person;

where the computation of gains or profits of a person in a year of income derived from a specified source results in a loss, that loss may only be deducted from gains or profits of that person derived from the same specified source in the following year and, in so far as the loss has not already been so deducted, in subsequent years of income;

the subparagraphs of paragraph (e) of this section shall be construed so as to be mutually exclusive;

gains chargeable to tax under section 3(2)(f) of this Act and losses referred to in subsection (3)(f) of this section shall not be deemed income or losses derived or resulting from specified sources for the purposes of this subsection;

any expenditure or loss which is not wholly and exclusively incurred by him in the production of the income;

any capital expenditure, or any loss, diminution or exhaustion of capital.

any expenditure or loss which is recoverable under any insurance, contract, or indemnity;

any income tax or tax of a similar nature, including compensating tax paid on income:

Provided that, save in the case of foreign tax in respect of which a claim is made under section 41, a deduction shall be allowed in respect of income tax or tax of a similar nature, including compensation tax paid on income which is charged to tax in a country outside Kenya to the extent to which that tax is payable in respect of and is paid out of income deemed to have accrued in or to have been derived from Kenya;

any sums contributed to a registered or unregistered pension, saving, or provident scheme or fund, except as provided in section 15(2)(o), or any sum paid to another person as a pension;

a premium paid under an annuity contract;

any expenditure incurred in the production of income deemed under section 10 of this Act to have accrued in or to have been derived from Kenya where such expenditure was incurred by a non-resident person not having a permanent establishment within Kenya;

any expenditure incurred in the production of dividend income deemed under paragraph (a) of subsection (1), of section 7 to have been derived from Kenya where such expenditure was incurred by a non-resident person not having a permanent establishment within Kenya;

deleted by Act No. 8 of 1978, s. 9;

any loss incurred in any business which, having regard to the nature of the business, to the principal occupation of the owner, partners, shareholders or other persons having a beneficial interest therein, to the relationship between any such persons or to any other relevant factor, the Commissioner considers it reasonable to regard as not being carried on mainly with a view to the realization of profits; and, without prejudice to the generality of the foregoing, a business shall be deemed not to be carried on for any year of income with a view to the realization of profits where more than one quarter of the amount of the revenue expenditure incurred in such business in such year relates to goods, services, amenities or benefits, or to the production of goods, services, amenities or benefits, which are of a personal of domestic nature enjoyed by the owner, partners, shareholders or other persons having a beneficial interest in the business or a member of the family or the domestic establishment of any such person;

deleted by Act No. 10 of 2006, s. 22;

an amount of deemed interest where the person is controlled by a non-resident person alone or together with not more than four other persons and where the company is not a bank or a financial institution licensed under the Banking Act (Cap. 488).

deleted by Act No. 8 of 1997, s. 33;

deleted by Act No. 8 of 2009, s. 23.

if sold in the open market, on the realized price;

in any other case, on the open market value, as if such price or value had been income of such farmer for the year of income in which he died.

on remuneration for services rendered by the non-resident directors (other than whole-time service directors) of a non-resident company the directors whereof have a controlling interest therein, in excess of five per cent of the total income of such company, calculated before the deduction of such expenditure, or of twenty-five thousand shillings, whichever is the greater, so, however, that in no case shall a deduction in excess of one hundred and fifty thousand shillings shall be allowed;

on executive and general administrative expenses expect to the extent that the Commissioner may determine that expenditure to be just and reasonable.

either person participates directly or indirectly in the management, control or capital of the business of the other;

a third person participates directly or indirectly in the management, control or capital of the business of both; or

an individual, who participates in the management, control or capital of the business of one, is associated by marriage, consanguinity or affinity to an individual who participates in the management, control or capital of the business of the other.

issue guidelines for the determination of the arm’s length value of a transaction for purposes of this section; or

specify such requirements as he may consider necessary for the better carrying out of the provisions of this section.

a resident person carries on business with a related resident person operating in a preferential tax regime; or

any Kenyan legislation, regulation or administrative practice which provides a preferential rate of tax to such income or profit, including reductions in the tax rate or the tax base; or

whether or not it is the ultimate parent entity of the group;

in case it is not the ultimate parent entity of the group, whether or not it is a surrogate parent entity; or

in case paragraphs (a) and (b) do not apply, the identity of the constituent entity which is the ultimate parent entity or surrogate parent entity and the tax residence of that constituent entity.

the information relating to the identity of each constituent entity, its jurisdiction of tax residence, if different, jurisdiction where such entity is organized, and the nature of the main business activity or activities of such entity;

the group's aggregate information including information relating to the amount of revenue, profit or loss before income tax, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees and tangible assets other than cash or cash equivalents with regard to each jurisdiction where the group has taxable presence; and

any other information as may be required by the Commissioner.

a detailed overview of the group;

the group’s growth engines;

a description of the supply chain of the key products and services;

the group’s research and development policy;

a description of each constituent entity’s contribution to value creation;

information about intangible assets and the group intercompany agreements associated with them;

information on any transfer of intangible assets within the group during the tax period, including the identity of the constituent entities involved, the countries in which those intangible assets are registered and the consideration paid as part of the transfer;

information about financing activities of the group;

the consolidated financial statements of the group;

tax rulings, if any, made in respect of the group; and

any other information that the Commissioner may require.

details and information on the resident constituent entity’s activities within the multinational enterprise group;

management structure of the resident constituent entity;

business strategies including structuring, description of the material-controlled transactions, the resident constituent entity’s business and competitive environment;

the international transactions and amounts paid to the resident constituent entity or received by the entity; and

any other information that the Commissioner may require.

the ultimate parent entity is obligated to file a country-by-country report in its jurisdiction of tax residence;

the jurisdiction in which the ultimate parent entity is resident for tax purposes has an international agreement and a competent authority agreement in force; and

the Commissioner has not notified the resident constituent entity in Kenya of a systemic failure, if any.

a non-resident surrogate parent entity files the country-by-country report on the group with the competent authority of the tax jurisdiction of the entity;

the jurisdiction in which the non-resident surrogate parent entity is resident requires the filing of country-by-country reports;

the competent authority of the jurisdiction in which the non-resident surrogate parent entity is resident and Kenya have a competent authority agreement for the exchange of information;

the competent authority in the jurisdiction where the non-resident surrogate parent is resident has not notified Kenya of a systemic failure; or

the non-resident parent entity has notified the competent authority in the jurisdiction of its tax residence that the entity is the designated surrogate parent entity of the group.

deducting from the sum arrived at under paragraph (a) a reserve for unexpired risks referable to that business at the percentage adopted by the company at the end of that year of income and adding thereto the reserve deducted for unexpired risks at the end of the previous year of income:

Provided that the reserves are estimated on the basis of actuarial principles, including discounting of ultimate costs; and

deducting from the sum arrived at under paragraph (a) a reserve for unexpired risks outstanding at the end of that year of income in respect of policies for which the premiums are received or receivable in Kenya at the percentage adopted by the company in relation to its insurance business as a whole, other than life insurance, but adding to that sum the reserve deducted for similar unexpired risks at the end of the previous year of income:

Provided that the reserves are estimated on the basis of actuarial principles, including discounting of ultimate costs; and

the amount of actuarial surplus, as determined under the Insurance Act and recommended by the actuary to be transferred from the life fund for the benefit of shareholders;

any other amounts transferred from the life fund for the benefit of shareholders; and

thirty per centum of management expenses and commissions that are in excess of the maximum amounts allowed by the Insurance Act (Cap. 487).

the same proportion of the amount of actuarial surplus recommended by the actuary to be transferred to the shareholders as the actuarial liability in respect of its long term insurance business in Kenya bears to the actuarial liability in respect of its total long term insurance business; and

the same proportion of any other amounts transferred from the life fund for the benefit of shareholders as the actuarial liability in respect of its long term insurance business in Kenya bears to the actuarial liability in respect of its total long term insurance business; and

the same proportion of thirty per cent of management expenses and commissions that are in excess of the maximum amounts allowed by the Insurances Act (Cap. 487) as the actuarial liability in respect of its long term insurance business in Kenya bears to the actuarial liability in respect of its total long term insurance business.

dividends chargeable to tax under section 3(2)(a)(i); and

income from the disposal of investment shares traded in any securities exchange operating in Kenya;

a society which has been exempted from all the provisions of the Co-operative Societies Act (Cap. 490) under section 92 of that Act; or

a society in respect of which the Commissioner is of the opinion, having regard to the number of members composing it, the nature of its business, the manner in which its business is conducted, the extent of its transactions with non-members or any other relevant factors, is a body corporate carrying on business for its own profit.

fifty per centum of its gross income from interest (other than interest from its members);

its gross income from any right granted for the use or occupation of any property, not being a royalty, ascertained in accordance with the provisions of this Act;

gains chargeable to tax under section 3(2)(f);

any other income (excluding royalties) chargeable to tax under this Act not falling within paragraph (a), (b) or (c) ascertained in accordance with the provisions of this Act.

a unit trust;

a collective investment scheme set up by an employer for purposes of receiving monthly contributions from taxed emoluments of his employees and investing them primarily in shares traded on any securities exchange operating in Kenya;

a real estate investment trust; or

an investee company of a real estate investment trust,

in relation to a members’ club, a person who, while he is a member, is entitled to an interest in all the assets of such club in the event of its liquidation;

in relation to a trade association, a person who is entitled to vote at a general meeting of such trade association;

an annuity includes any amount payable on a periodic basis, whether payable at intervals longer or shorter than a year;

where the continuation of payments depends upon the survival of an individual and where, in the event of the death of such individual before such payments aggregate a stated sum, the contract provides that the unpaid balance of the stated sum shall be paid either in a lump sum or by instalments, then the contract shall be deemed for the purpose of determining the expected term thereof to provide for the continuance of such payments thereunder for a minimum term certain equal to the nearest complete number of years required to complete the payment of the stated sum;

to any annuity payable under a registered annuity contract or a registered trust scheme; or

to any annuity purchased under any direction in a will, or purchased to provide for an annuity payable under a will or settlement out of income of property disposed of by such will or settlement; or

to any annuity purchased under any pension scheme or pension fund; or

to any annuity purchased by any person in recognition of the services or past services of another person.

the sum of the contributions made by the employee to registered funds in the year; or

thirty per cent of the employee’s pensionable income in the year; or

two hundred and forty thousand shillings (or, where contributions are made to registered funds of the employer in respect of a part year of service of the member, twenty thousand shillings per month of service).

the sum of the contributions in the year made by the employer on behalf of the member under defined contribution provisions of registered funds including contributions made out of surplus funds as required under section 22 (6); and by the member to registered funds of the employer;

thirty per cent of the member’s pensionable income from the employer; or

two hundred and forty thousand shillings (or, where contributions are made to registered funds of the employer in respect of a part year of service of the member, twenty thousand shillings per month of service),

the sum of the contributions made by the employer and by the employees in the year to registered funds in respect of members of the defined benefit registered funds of the employer; or

thirty per cent of the sum of the pensionable incomes from the employer in the year of members of defined benefit registered funds of the employer; or

where an employee retires or terminates his employment with an employer and joins the services of another employer and requests funds to be transferred from the former employer’s registered fund to the new employer’s registered fund; or

where an employer establishes a new registered fund and transfers the existing pension rights of an employee to that new registered fund; or

where an employee terminates his employment with an employer and requests funds, which would otherwise be withdrawn or commuted as a lump sum, to be transferred to a registered individual retirement fund; or

where an employee and the employer agree mutually to transfer the funds relating to the existing retirement benefit rights of the employee from one registered fund of the employer to another registered fund of that employer provided that the trust deeds of both registered funds allow such a transfer; or

where an individual beneficiary directs that all funds in a registered individual retirement fund be transferred directly to another such fund:

the sum of the contributions made by the individual or by the employer of the individual on his behalf on or before the 31st of December of the year; or

thirty per cent of pensionable income of the individual in that year; or

two hundred and forty thousand shillings (or, where the contributions are made on behalf of the individual by his employer in respect of a part year of service of the individual, twenty thousand shillings per month of service) reduced by the amount of the contributions made by the individual or by an employer on behalf of the individual to the National Social Security Fund in that year.

to the charging to tax of persons who, but for the adjustments, would not be charged to the same extent;

to the charging of a greater amount of tax than would be charged but for the adjustments.

income which is dealt with under a settlement so that it, or assets representing it, will or may become payable or applicable to or for the benefit of a child of the settlor in the future (whether on the fulfilment of a condition, or the happening of a contingency, or as the result of the exercise of a power of discretion, or otherwise) shall be deemed to be paid to or for the benefit of that child;

any income so dealt with which is not required by the settlement to be allocated at the time when it is so dealt with, to any particular child or children of the settlor shall be deemed to be paid in equal shares to or for the benefit of each of the children to or for the benefit of whom or any of whom the income or assets representing it will or may become payable or applicable;

in relation to any settlor, only income originating from that settlor shall be taken into account as income paid under the settlement to or for the benefit of a child of the settlor.

"child" means a child under the age of eighteen years and includes a step-child, an adopted child and an illegitimate child;

"settlement" includes any disposition, trust, covenant, agreement, arrangement, or transfer of assets, but does not include any disposition, trust, covenant, agreement, arrangement, or transfer of assets through a registered family trust or resulting from an order of a court unless that order is made in contemplation of this provision;

"settlor", in relation to a settlement, includes any person by whom the settlement was made or entered into directly or indirectly, and any person who has provided or undertaken to provide funds directly or indirectly for the purpose of the settlement, or has made with any other person a reciprocal arrangement for that other person to make or enter into the settlement;

has a right to reassume control, directly or indirectly, over the whole or any part of the income arising under the settlement or of the assets comprised therein; or

is able to have access, by borrowing or otherwise, to the whole or any part of the income arising under the settlement or of the assets comprised therein; or

has power, whether immediately or in the future and whether with or without the consent of any other person, to revoke or otherwise determine the settlement and in the event of the exercise of such power, the settlor or the wife or husband of the settlor will or may become beneficially entitled to the whole or any part of the property comprised in the settlement or to the income from the whole or any part of such property:

his spouse;

any ancestor, lineal descendant, brother, sister, uncle, aunt, nephew, niece, step-father, step-mother, step-child, adopted child, and, in the case of an adopted child, his adopter or adopters;

the spouse of any such relative referred to in paragraph (b);

a settlement made for valuable and sufficient consideration;

any agreement made by an employer to confer a pension upon an employee in respect of any period after the cessation of employment with such employer, or to provide an annual payment for the benefit of the widow or any relative or dependant of that employee after his death, or to provide a lump sum to an employee on the cessation of such employment.

in the case of a person other than an individual, as regards all income charged under section 3 of this Act; and

in the case of an individual, as regards all income charged under that section other than gains or profits from any employment or services rendered.