Siemens Aktiengesellschaft's Kenyan permanent establishment applied a 3% net cost plus margin based on its limited-risk profile, but Kenya's Tax Appeal Tribunal upheld the tax authority's assessments in 2024, applying a benchmark median of 6.94%. The Tribunal found Siemens failed to discharge its burden of proof and ruled that allocated head office costs constituted management fees subject to withholding tax under Kenyan law ... Read more

July 1 2022 the State Secretary of Finance has issued updated guidance on the profit allocation to permanent establishments – Decree no. 16683. The purpose of the guidance is to clarify the way in which the Tax and Customs Administration assesses the profit allocation to permanent establishments. Attention is paid to the introduction of the object exemption in the Corporate Income Tax Act 1969 (Corporate Tax Act 1969) in 2012, a number of editorial changes have been made and references to other decrees and documents have been updated. Click here for Unofficial English translation Click here for other translation ... Read more

Two Swiss investors routed private equity fund management through a Jersey entity, retaining all advisory functions in their Swiss AG while allocating only one-third of fees offshore. The Swiss tax authority challenged the arrangement, arguing the Jersey entity lacked substance and the Swiss investors controlled all key risks. The Zurich Administrative Court ruled in favour of the tax authority in February 2020, recharacterising the income attribution based on substance over form ... Read more