Tax Treaty Case Law around the Globe 2025

1. Introduction

This chapter discusses the Kenyan High Court judgment of Commissioner of Domestic Taxes v Total Kenya Limited. The case concerns whether Total Kenya Limited (the taxpayer), a wholly-owned Kenyan subsidiary of the French multinational Total Outre Mer (parent company), was obligated to withhold tax on payments made to its parent company for management and professional services. In reaching its decision, the court had to consider whether management and professional fees were encompassed within the ambit of “other income” in Art. 21 of the Kenya-France Income Tax Treaty (2007) or whether such management and professional fees fell only within the scope of “business profits” in Art. 7.

2. Facts of the case

The taxpayer is a company incorporated in Kenya that is operating in the petroleum products sector. It entered into a technical assistance agreement with its French parent company as part of its operations under which the parent company provided technical and general assistance (including management and professional services) to its Kenyan subsidiary. The taxpayer made payments to the parent company for these services without withholding any tax from them between 2011 and ...