Withholding Tax rates vary depending on the income, and whether the recipient of the income is resident or non-resident. There no exemptions associated with Withholding Tax. The total compensation is subject to PAYE with admissible deductions such as retirement contributions, deposits in HOSP, and owner-occupied interests. PAYE returns are filed online via iTax NPOs without PAYE to remit should file a NIL return via iTax. PAYE is deducted monthly at the prevailing individual income tax rates, on or before the 9th of the following month. Kenyans working for NPOs are not exempt from PAYE.įoreigners working for NPOs may get exemptions on their PAYE but this applies on a case-by-case basis. The compensation earned is basic pay and benefits. NGO’s usually have both local and international employees and directors. Also, the presence of double taxation agreements applies. The income Tax Act has set out qualifications for Kenya tax residency and in addition, the tax rates used to withhold tax and the taxes applicable such as PAYE, VAT, WHT. There are various taxes applicable to NPOs whether they are NGOs or Companies based on their type of business registered and tax rates apply to depend on the tax residency of the service providers. Taxation for Not-for-Profit Organizations The tax laws confer only limited tax benefits on corporate donors and on individual donors. Kenya also subjects certain sales of goods and services to VAT, with a fairly broad range of exempt activities. Unrelated business income is subject to tax under certain circumstances. Kenya exempts from corporate income tax, the income of certain Not-for-Profit Organizations that carry out specific types of activities.
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