Is Capital withdrawal taxable ?
CPA David Ndiritu Mwangi
Certified Public Accountant, Tax Agent, Tax Advisor, Tax Consultant, Business Advisor, Tax Trainer, Tax Auditor ,Tax Researcher.
Case Study: Philip Kinisu Vs KRA
KRA carried out an investigation into tax matters of Kinisu for the period covering Jan 2010 and Dec 2015 and subsequently issued an additional assessment of KES 133m on 11/07/2017
Kinisu objected on 04/08/2017
KRA confirmed the objection decision on 11/10/2017
Kinisu appealed to TAT on 17/11/2017.
Among the issues at hand, was the income tax assessment of Mr.Kinisu's capital withdrawal from PWC Central Africa
Kinisu submitted that KRA erred in law by charging tax on capital payback upon his exit from PWC Central Africa. He produced a loan agreement to prove that he had borrowed money to invest in PWC
KRA responded that Kinisu failed to prove the above assertions by failing to produce sufficient documentation.
The appeal partially succeeded
The tribunal ruled that capital payback could not be treated as income and therefore not chargeable to tax.?The documentation provided to support it was therefore sufficient.
The decision was delivered on 18/12/2019
No it's tax exempt,it only reduces ones shareholding capacity
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2 年nice