KASNEB Advanced Taxation Notes


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This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to solve complex tax issues, implement tax planning initiatives and administer tax in various business environments.


A candidate who passes this paper should be able to:

  • Compute the tax liability of enterprises, entities and specialised business activities.
  • Handle all value added tax matters
  • Apply the procedure for conducting a tax investigation
  • Explain the tax dispute resolution mechanism
  • Explain the tax implications for cross border business activities.
  • Develop tax policies


Taxation of business income and specialized business activities

  • Partnership business
  • Admission of a new partner and retiring partners during the year
  • Conversion of partnerships into liability companies
  • Incomplete records pertaining to partnership businesses
  • Case law on taxation of partnership businesses

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Limited companies

  • Taxation of companies, including holding company, subsidiaries, branches and related parties
  • Incomplete records pertaining to limited companies
  • Minimum tax
  • Shortfall tax computation
  • Taxation of dividends
  • Case law on taxation of limited companies
  • Rental income, including residential rent income, Commercial rent income and Real estate investment trusts (REITS)
  • Charitable institutions
  • Leasing entities, including hire purchase lease agreements
  • Co-operative societies, Saccos
  • Trade associations, amateur sporting association and clubs
  • Trust bodies, settlements and estates under administration
  • Financial institutions: Banks, insurance companies
  • Sea and air transport undertakings
  • Collective investment schemes
  • Professional, training, management, agency, and consultancy fees
  • Property developers and contractors
  • Taxation of extractive industries
  • Capital gain tax
  • Digital service tax
  • Application of relevant case law

Value added tax administration

  • Obligations of a taxable person and offences relating to VAT
  • Value added tax computation
  • Restriction of input tax claimable
  • Imported services and VAT withholding agents
  • VAT refunds and bad debt relief computation
  • VAT Accountant certificate
  • Value added tax automated assessments
  • I tax significance and application in value added tax administration
  • Application of relevant case law

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Tax investigations

  • Tax fraud
  • Civil and criminal tax investigation
  • Events which may trigger an investigation
  • Back duty and in-depth examination
  • Customs and excise investigations
  • Negotiation for settlement: Tax amnesty, Tax Penalties and Enforcement for outstanding taxes
  • Types of tax audit and their significance
  • Application of relevant case law

Tax dispute resolution mechanism

  • Tax disputes
  • Stages of tax dispute resolution process
  • Tax dispute resolution process cycle
  • Legal framework and objectives of Alternative Dispute Resolution
  • Types of tax disputes eligible for Alternative Dispute Resolution
  • Benefits of Alternative Dispute Resolution
  • Parties to Alternative Dispute Resolution and their roles
  • Issues exempted from Alternative Dispute Resolution
  • Alternative Dispute Resolution agreement terms and timelines
  • Termination of alternative dispute resolution

Taxation of cross border activities

  • Distinction between trading in and trading with a country
  • Double taxation agreements; theory, design and application
  • Regional perspective with reference to the East African Community (EAC) andthe Common Market for Eastern and Southern Africa (COMESA)
  • Most favored nation status
  • Nature, characteristics and significance of One Stop Border Posts (OSBPs)
  • Generalized system of preference and AGOA
  • Tax havens and treaty shopping
  • Tax information exchange agreements(TIEAS)
  • Transfer pricing: oecd guidelines
  • Application of relevant case law

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Tax planning

  • Tax planning for individuals: By way of Tax exempt activities, transactions that are allowable expenses and transactions attracting tax setoffs
  • Tax planning for body corporates
  • Identifying opportunities to alleviate, mitigate or defer the impact of direct or
  • indirect taxation
  • Evaluating remuneration packages
  • Tax avoidance and anti-tax avoidance provisions in the tax Act, short-fall distributions of dividends
  • Sectoral tax incentives
  • Disposal of business operations and restructuring of activities
  • Tax risk management

Tax systems and policies

  • Types of tax systems
  • Role of taxation in economic development; tax base expansion, efficiency in tax systems
  • Design of a tax policy
  • Criteria for evaluation of a tax system
  • Tax reforms and modernisation of tax systems under various Acts
  • KRA structure – Large Tax Payer and Medium Tax Payer organisations

Professional practice in taxation

  • Forms of tax practice and matters relating thereto
  • Matters relating to new clients
  • Handling of client work
  • Disclosures in tax returns, computations and correspondence with the RevenueAuthority
  • Moral and ethical issues in taxation
  • Tax agents, appointment, obligations, professional liability
  • Cancellation of tax agents license
  • Role of tax agents in appeals procedure
  • Tax health check

Download KASNEB Advanced Taxation Notes

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