For a Company

1) A company incorporated under the laws of Kenya
2) A company whose management and control of affairs was exercised in Kenya in a
    Particular year of income under consideration.
3) A body, which has been declared as a resident by the minister in the gazette.
As a tax concept, Kenya uses residency, nationality or domicile and the significance is that Kenyan residents pay income tax on their income from Kenya and on income for services rendered anywhere else in the world with reprieve in section 41 of Double Tax Relief. If worldwide income was earned in a city, where there is a double taxation treaty

1) Ordinary residents: Voluntarily accepted for taxation purposes.
2)  Habitual residents: Regular physical presence ending for some time.

Citizenship refers to law by which a person is governed by birth or if a company by incorporation while citizenship may be acquired, nationality not. Domicile refers to a residence acquired as a final abode plus the intention to retain it permanently.

- It may be domicile of origin, which may be equal to citizenship because law assigns it at
- Domicile of choice acquired voluntarily upon one attaining legal capacity.
- Domicile by operation of the law; assigned to those who cannot acquire domicile by choice.
Sir George Arnatoglu vs. Commissioner of Income Tax
The appellant, in 1960, had a home in Dar es Salaam and was present in Tanganyika for 249 days. In 1961, he sold his home and was in Tanganyika for 124 days. In 1962, he had no home but was present for 62 days. In the tax assessment for 1962, he was assessed as being resident but disputed the assessment arguing that he was not a resident in terms of East Africa Management Act whose section 2 was similar to Kenya’s.
He argued that the definition of resident in the 1928 Act did not permit it to aggregate periods of residency with periods of mere presence.
That averaging in section 1b (2) meant that four months presence was required in each of the relevant years.

It was held that to be permissible under the Act, to aggregate period of residence and those of presence in territory, period to be averaged in paragraph b (11) was the total of days spent in territory over the three years.
       “I wish to draw attention to the general scheme of residency. An individual is defined. As residing in the territory if he in fact does so. An individual is deemed to reside in the territories if facts are such that he will not normally be regarded as residing in the territory or there would be doubt as to whether he did so. I wish to emphasize that the deeming provision of this provision only comes into play if facts are such
        That the individual will not normally be regarded as residing in the territories. I also
        Wish to point out that modern legislature requires something to be deemed that of
        Necessity means that it is to be treated as a thing different from what it in fact is. If
        Deeming provisions are resorted to, then one seeks to ascertain whether a person
        Who is in fact not a resident, should be treated as one. For purposes of deeming
        Provision, it is immaterial whether he had a home in the two preceding years so long
        As on the basis of averaging he was present in each of these two years for the
        Requisite period. Appeal dismissed.”

    Commissioner of Income Tax vs. Nooran
The appellant appealed against the High Court decision that had held the respondent to have been resident in East Africa in years of income 1962- 1965. The respondent was born in Mombasa where he had some properties. He then moved to Tanzania where he lived from 1932-1960. When he went to England for treatment, and for the education of his children, he had a home in Tanga and a flat in Mombasa. In 1962-1965, he had occupied a guest home at Tanga and eventually a whole house for intermittent period. He sold it in 1968 and finally settled in Mombasa in the same year. He retained business and bank accounts in East Africa during the period he was away in England. In 1964, he became a Kenyan citizen. After living for England in 1960, he returned to East Africa on  12th  December 1962 where he stayed for 54 days. In 1964, he  came to East Africa for 52 days. In 1965, he came for 48 days. In 1967, he stayed for a few days. In 1968, he settled permanently. The issue was whether he had a home in East Africa in terms of the E. A. Act section 62 and for purposes of clarity. Residence in territories when applied to any year of income:
    -to an individual, this means that an individual resides except for such temporary
    Absences as the commission may determine to be reasonable in any of the territories
  -An individual shall be deemed to reside in territories if he has a home in any of the
    Territories, which for at least a portion of the year was available to him and was
    Kept for purposes of his use and dwelling.
  -The home did not have to be occupied for a whole year to qualify as a home.
The fact that he had a home in England was immaterial since a person may have one or more homes at the same time. Appeal was dismissed.

Normally,  a person will be said to be a resident by the mere fact that the first part refers to temporary absence as the commissioner may determine to be reasonable does not mean that it lies within the commissioners power to exclude the first part merely by refusing  to deem it unreasonable.

Other jurisdictions base tax liability on domicile with consequences that those not domicile in the jurisdiction may not be charged tax or may be charged a higher tax.

I R C vs. Bullock
Bullock domiciled in Canada but had lived in England for 45 years. During that period, he won the love and affection of a fair English woman and married her. One day he told her that if she ever pre-deceased him, he would never return to Canada. Before this happened, he filed income tax forms indicating that he was domiciled in England. This was contested by the commissioner and assessed a higher rate than that of a foreign domicile person upon the first tribunal ruling in his favor. The commissioner appealed.
Domicile is residence plus intention to remain permanently. Bullock   domiciled in Canada and they assessed a higher domicile rate.

Bangs vs. Inhabitants of Brewster
B was a shipmaster living in Brewster MA went to see oceans and sent his wife to Orleans in Louisiana with the objective of setting up a new home in Orleans and shifting from Brewster. Eventually, he joined her there. In the meantime, authorities demanded tax from Bangs as a domicile of their country, which Bangs paid under protest and filed a suit to recover the same on grounds that he had changed domicile to Orleans.
It was held that his application be allowed since he had sent his wife to Orleans with the intention that he makes it his new home. That changed his domicile as establishment of a new home and the intention to retain it permanently in Orleans entitled him to a refund.

Cesena Sulphur Co. vs. Nicholson
A company was incorporated in England to   take over and work sulphur mines in a place called Cesena in Italy. Manufacture, sale and management of the company business was done in Italy.  The MD of the company was permanently resident in Italy and registered there where three quarters of the shares were also resident. However, the Board of Directors served in London from where it controlled sale, order direction and management of the company.  Annual General Meetings were also held in London where dividends were also declared.
The issue was whether the company was a resident in England to subject the whole of its worldwide income to tax or whether it was resident in Italy. Since every act of the company’s management was done in England, main place of management of the company was London and they were a resident in England with consequences that all its worldwide income was subject to English taxation.

Section 2 defines residence.
Section 4A deems any profit of a business partly in Kenya and partly outside Kenya to be that of a resident company.    


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