A Nairobi High Court on Friday ordered Thomas De la Rue, a currency and security print company, to pay taxes totaling KES 1,106,043,698 after ruling in favour of the Kenya Revenue Authority (KRA).
This decision came after De La Rue Currency and Security Print Company successfully appealed a Tax Appeals Tribunal (TAT) decision ordering the company to pay back taxes.
The company was discovered to have entered into a contract with the Central Bank of Kenya (CBK) to print money, and as a result, it was not allowed to deduct royalties paid to its parent company De la Rue International as an allowable expense under Section 15(1) of the Income Tax Act.
The Tribunal reached this decision on June 4, 2021.
The company claimed that it owed no taxes on its income because it paid royalties to De La Rue International for services rendered to it.
KRA countered that the company had a contract with CBK, which carried significant risk.
According to the authority, no new intellectual property rights had emerged that required the payment of royalties.
After reviewing the evidence, the High Court overturned the Tribunal’s decision, concluding that the appeal lacked merit and that there was insufficient evidence to convince it.
