M-Kopa, a fintech company incorporated in the UK, was recently ordered to pay KSh 885.87 million in taxes by the Kenyan Tax Appeals Tribunal. The Kenya Revenue Authority (KRA) had assessed M-Kopa’s tax liabilities, including withholding taxes and Pay As You Earn (PAYE) taxes, claiming that the company was a tax resident of Kenya. This was based on the fact that key management decisions were made in Kenya, making it the company’s place of effective management (POEM).

M-Kopa disputed this, arguing that its board meetings were held outside Kenya, and thus the company should not be subject to Kenyan taxes. However, the tribunal upheld the KRA’s assessment for taxes owed from November 2019 onwards, ruling that M-Kopa’s key decisions were made in Kenya, solidifying its tax residency. The tribunal did, however, set aside the withholding tax assessments for 2017 to 2019 and on deemed interest.