ADVOKS GLOBAL · KENYA
Income Tax Act
7. Income from dividends
Edition: 2026-07-01 · In force
7. Income from dividends
(1)For the purposes of section 3(2)(b)–(a)a dividend paid by a resident company shall be deemed to be income of the year of income in which it was payable;(b)an amount shall be deemed to be a dividend distributed by a company to a shareholder where–(i)any cash or asset is distributed or transferred by that company to or for the benefit of that shareholder or any person related to that shareholder;(ii)the shareholder or any person related to that shareholder is discharged from any obligation measurable in money which is owed to that company by that shareholder or related person;(iii)the amount is used by that company in any other manner for the benefit of the shareholder or any person related to that shareholder;(iv)any debt owed by the shareholder or any person related to that shareholder to any third party is paid or settled by that company;(v)the amount represents additional taxable income or reduced assessed loss of that company by virtue of any transaction with the shareholder or related person to such shareholder, resulting from an adjustment.(c)notwithstanding paragraphs (a) and (b), a transfer of property by a company to its shareholders under paragraph 6(2)(i) of the Eighth Schedule shall not be deemed to be a distribution for the purposes of this Act.(2)Notwithstanding section 3(2)(b), a dividend received by a resident company, other than a dividend received by a company which controls directly or indirectly less than twelve and one-half per cent of the voting power of the company paying the dividend, shall be deemed not to be income chargeable to tax.(3)A dividend received by the financial institutions specified in the Fourth Schedule shall be deemed to be income chargeable to tax in accordance with this section.