Sybrin Kenya Limited v The Commissioner of Domestic Taxes
The bottom line
#Kenya's Court of Appeal confirmed that services billed only to foreign affiliates count as exported services, so Kenyan VAT does not apply.
What this practically means
#Executive summary
#Key legal issues
#Whether the appellant's services to its foreign affiliates SSPL and SL constituted exported services under section 2 of the VAT Act
The services were exported services because they were provided for use or consumption by SSPL (South Africa) and SL (Guernsey), the customers identified in the agreements, and were therefore not subject to VAT.
The Court examined the Memorandi of Agreements between the appellant and the foreign affiliates. The agreements defined the customer as the affiliates' customers in the Kenyan territory and provided that all work be invoiced and collected from the foreign affiliates only, with no direct contractual obligation with the Kenyan customers. The Court held the foreign affiliates utilised and consumed the appellant's taxable supplies as primary consumers. Applying the OECD destination principle, tax is determined by the rules of the jurisdiction of consumption, here the jurisdiction of the affiliate companies.
Scope of appellate jurisdiction under section 56(2) of the Tax Procedures Act
The appeal to the Court of Appeal in tax matters is confined to questions of law; the Court engages with facts only as background and context and to check whether conclusions are supported by evidence or are perverse.
The Court invoked section 56(2) of the Tax Procedures Act and adopted the summary in Mati vs. Returning Officer Mwingi North Constituency & 2 Others on what constitutes a matter of law, namely interpretation or construction of statutes or their application to facts established by the trial court, without re-evaluating credibility of witnesses.
Legal principles established
#- Under section 2 of the VAT Act, the characterisation of a service as an exported service turns on the place of use or consumption of the service, and where the business agreement identifies the foreign affiliate as the customer, the foreign affiliate is the consumer for VAT purposes.
- An appeal to the Court of Appeal in tax matters lies on a question of law only under section 56(2) of the Tax Procedures Act.
Court orders
#- 1.The appeal is allowed
- 2.Costs to the appellant
- 3.Orders accordingly
- On appeal from
- High Court of Kenya
- Not stated
- Jurisdiction invoked
- Section 56(2) of the Tax Procedures Act (appeal on a question of law only)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sybrin Kenya Limited v The Commissioner of Domestic Taxes", Case Analysis (2026). Not stated in the judgment (Memorandum of Appeal dated 8th May 2024). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1293/eng@2026-07-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.