M-KOPA Holdings, a fintech and asset financing company, has been ordered to settle tax obligations in Kenya following a recent tribunal ruling by the Tax Appeals Tribunal.
The company, which offers pay-as-you-go solar systems, smartphones, and electric bikes across Africa, had appealed against a $6.8 million tax demand covering the years 2017 to 2019.
The Kenya-headquartered startup had argued that it is incorporated in the United Kingdom and therefore should not be subject to Kenyan taxes under the Kenya-UK Double Taxation Treaty (DTT).
However, the tribunal dismissed this defence, noting that M-KOPA’s key management decisions are made in Kenya, as its Chief Executive Officer (CEO), Chief Financial Officer (CFO), and Chief Commercial Officer (CCO) reside in the East African nation.
This was a significant factor for the court to determine that the fintech startup’s tax residency was in Kenya, making the startup subject to Kenyan income and capital gains taxation.
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