Imagine this: You’re an expatriate IT consultant from Germany, living and working in Nairobi. Every month, you diligently pay your taxes to the Kenyan Revenue Authority. But just as you’re settling into your new role and lifestyle, you receive a tax notice from your home country—demanding tax on the very same income. Frustrating, right?
Welcome to the world of double taxation, a common issue that many expatriates encounter when working abroad.
Who is an Expatriate?
An expatriate is a person living and working outside their home country. In Kenya, this would typically be someone who is not a Kenyan citizen but resides in the country for employment or business purposes, usually under a valid work permit or special visa.
Understanding Double Taxation
Double taxation happens when two different countries tax the same income. For example, if you’re an expatriate working in Kenya, you might be taxed by both the Kenyan government and your home country. This can be a real financial headache, especially if there are no clear legal frameworks in place to prevent it.
But don’t panic—there are solutions.
What Does the Law Say?
Kenya’s Constitution recognizes the importance of fairness and equality in its taxation system. This means that expatriates should not be unfairly disadvantaged by the tax system simply because they are foreigners.
How Can Double Taxation Be Avoided?
To address this issue, many countries (including Kenya) enter into Double Taxation Agreements (DTAs)—bilateral or multilateral treaties designed to prevent the same income from being taxed twice.
These DTAs typically include clauses that allow for either:
- The Exemption Method – where one country agrees not to tax the income.
- The Credit Method – where tax paid in one country is credited against tax due in the other.
So, for our German consultant in Nairobi, he gets to benefit from the Double Taxation Agreement between Kenya and Germany which provides that;
a) For German residents: Income derived from Kenya and taxable there is exempted from German taxation. However, this income is considered when determining the applicable tax rate for other income in Germany (known as the “exemption with progression” method).
b) For Kenyan residents: The agreement outlines methods to avoid double taxation, ensuring that income taxed in Germany isn’t taxed again in Kenya
What If There’s No Double Taxation Agreement?
Even in the absence of a formal agreement, Kenya provides a fallback: unilateral relief. This is a domestic tax provision that allows a deduction for foreign taxes paid, effectively reducing the total tax burden for the taxpayer.
Let’s say you’re working remotely for a German company, and there’s no Double Tax Agreement (DTA) between Kenya and Germany — Kenya can still cut you some slack by allowing you to deduct the tax you paid in Germany from what you owe locally. It’s not a perfect fix, but it softens the double-tax blow.
Why This Matters for You?
Whether you’re an employer hiring expatriates or an expat navigating the Kenyan tax system, understanding your rights and the legal remedies available can save you from paying more than you should. It also aligns with Kenya’s constitutional promise of fairness and equality in taxation.
B. Are you A Foreigner Working Remotely? Here’s What KRA Wants You To Know About Taxes!
Are you working from home, a café, or even the beach for a local or foreign company? If you’re based in Kenya, KRA may expect you to pay your taxes, no matter where your boss is.
When Can A Remote Worker be Subjected to Taxes?
A remote worker is anyone working outside a traditional office, maybe from home or another country, while doing their job online. You’re considered a tax resident if you live in Kenya for more than 183 days in a year.
That means you must declare and pay tax on all income, even if your employer is based abroad.
What If You’re Paid In Dollars Or Euros?
It doesn’t matter. If you live in Kenya and qualify, KRA wants a share of that income. You’ll need to include it when filing your tax returns.
Foreign Employers & Companies – Heads Up!
If a foreign company has full-time staff working from Kenya, KRA may treat it like it has an office here. That means the company might need to pay:
- Income tax
- PAYE (for employee salaries)
- Withholding tax
- VAT
Yes, Even Remote Workers Need A KRA PIN: Here’s Why
Thanks to a new tax law, from 27th December 2024, anyone working remotely for a Kenyan company, no matter where they live, must register for a KRA PIN. This is to make sure everyone pays their fair share.
Can You Be Taxed Twice?
Not if there’s a Double Tax Agreement between Kenya and your employer’s country. If not, you might still get some relief by proving you already paid tax elsewhere.
Tax Borders May be Blurry, But Non-Compliance Isn’t
Remote work is here to stay, but so is tax. Whether you’re working from Nairobi, Naivasha, or New York—if you earn from a Kenyan company or live in Kenya, make sure you are tax-compliant. Because even if your office is on Zoom, KRA is watching.
Final Word: Tax Laws Are Changing — Are You Ready?
The line between local and global is blurrier than ever — but when it comes to taxes, there’s nothing vague about KRA’s expectations. Whether you’re an expat living it up in Lavington, a remote worker sipping chai while coding for a Berlin startup, or a multinational with teams dialling in from Diani — you need to know where the tax hammer might fall.
Tax is no longer just about where your employer is based. It’s about where you sit, earn, click, and even Zoom. So before the revenue authorities come knocking, ask the right questions — or better yet, ask us.
Q&A – Real Questions. Real Expats
Q: I’m an American digital nomad working from Nairobi for a US tech company. Do I owe taxes in Kenya?
A: If you’ve been in Kenya more than 183 days in a year, KRA considers you a tax resident. That means you’re taxed on your global income — yes, even that USD paycheck.
Q: My salary is paid in euros — surely that doesn’t count as “Kenyan” income?
A: It does if you live and work in Kenya. KRA is less interested in the currency, more in where you are physically located while working.
Q: What if my foreign employer doesn’t have a physical office in Kenya?
A: If they have you working full-time in Kenya, they could still be considered to have a permanent establishment here, triggering corporate tax obligations.
Q: I’m here on a six-month consultancy — do I still need a KRA PIN?
A: Yes. If you’re earning locally and engaging in any formal transaction (like renting, banking, or billing clients), you’ll need one — and fast.
Q: Is there a way to legally avoid double taxation?
A: Absolutely. You may be entitled to tax relief if there’s a Double Tax Agreement between Kenya and your home country (like Germany, India, the UK). Even without one, Kenya’s unilateral relief rules offer some cushion — but you must claim it properly.
LET’S TALK BEFORE THE TAXMAN DOES
Whether you’re:
- An expatriate trying to avoid double taxation,
- A foreign employer wondering if your remote Kenyan team triggers a permanent establishment,
- Or a global contractor unsure if you need a KRA PIN.
We can help you navigate the grey zones before they become red flags. Reach out to our Tax & Regulatory team at info@mmw.legal because staying compliant doesn’t mean flying blind.
Article by Stella Muraguri | Moffat Atancha | Michael Muya
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