🇰🇪 Kenya Tax Guide — Income, Corporate & VAT Rates

The tax rates in Kenya range from 10% to 30% for individuals, with a corporate tax rate of 30% and a value-added tax (VAT) rate of 16%.

Tax System Overview

Kenya has a territorial taxation system, where tax is levied on income earned within the country, regardless of the taxpayer's residence. However, worldwide taxation applies to residents, who are taxed on their global income, with credits available for taxes paid in other countries. Residency rules for tax purposes in Kenya are based on physical presence, with individuals considered resident if they are present in the country for 183 days or more in a tax year, or have a permanent home in Kenya and are present in the country at any time during the tax year.

The Kenya Revenue Authority (KRA) is responsible for administering taxes in Kenya, and taxpayers are required to register for a Personal Identification Number (PIN) to file tax returns and access other tax services. Taxpayers can register for a PIN online or at a KRA office, and must provide required documentation, such as a national ID or passport. The tax year in Kenya runs from January to December, and taxpayers are required to file their tax returns by June 30th of the following year.

Personal Income Tax

Corporate & Business Tax

• The corporate tax rate in Kenya is 30%, with a lower rate of 15% for companies listed on the Nairobi Stock Exchange.
• Small business incentives are available, including a reduced tax rate of 15% for small and medium-sized enterprises (SMEs).
• Free zones are available in Kenya, offering tax exemptions and other incentives to companies operating in these zones.
• Companies are required to register with the KRA and obtain a tax compliance certificate to operate in Kenya.
• Value-added tax (VAT) registration is also required for companies with an annual turnover of KES 5 million or more.

VAT / Sales Tax

• The standard VAT rate in Kenya is 16%, with a reduced rate of 0% for certain goods and services, such as basic foodstuffs and healthcare services.
• Exemptions are available for certain goods and services, such as education and financial services.
• A tourist refund scheme is available, allowing tourists to claim a refund of VAT paid on certain goods and services.
• VAT returns must be filed online using the KRA's iTax system, and VAT payments must be made by the 20th of the following month.

For Expats & Foreign Workers

• Tax residency rules apply to expats and foreign workers, who are considered resident if they are present in Kenya for 183 days or more in a tax year.
• Kenya has double taxation treaties with 12 countries, including the UK, US, and Canada, to avoid double taxation of income.
• Social security contributions are required for expats and foreign workers, with a contribution rate of 5% of salary.
• Remittance rules apply to expats and foreign workers, who are required to remit taxes and other payments to the KRA.
• Expats and foreign workers are required to register with the KRA and obtain a tax compliance certificate to work in Kenya.
• Work permits are required for foreign workers, and must be obtained before starting work in Kenya.

Crypto & Investment Income

• Investment income, such as dividends and interest, is taxed at a rate of 5% or is included in income and taxed at the applicable tax rate.
• Dividends are taxed at a rate of 5%, with a credit available for taxes paid by the company.
• Cryptocurrency is taxed as income, with gains subject to capital gains tax at a rate of 5%.
• Capital gains tax is also applicable to gains from the sale of property and other assets, with a rate of 5% applicable to residents and non-residents.