Kenya taxes residents on worldwide income and non-residents on Kenya-source income only. Kenya operates a self-assessment system, with the Kenya Revenue Authority (KRA) conducting post-filing review and audit.
The Kenyan tax year is generally the calendar year. The individual filing deadline is 30 June of the following year.
Kenya's headline corporate income tax (CIT) rate is 30%.
The headline personal income tax (PIT) rate is 35%.
The standard VAT/GST (or equivalent consumption tax) rate is 16%.
Per Section 2 of the Income Tax Act, an individual is a Kenyan tax resident if they have a permanent home in Kenya, or are present in Kenya 183 days or more in the year of income, or present in that year and in each of the two preceding years for periods averaging more than 122 days per year. A company is resident if incorporated in Kenya, has its place of effective management in Kenya, or has been declared resident by the Cabinet Secretary for National Treasury. Residents are taxed on worldwide income; non-residents only on Kenya-source income.
A non-Kenyan entity has a Kenyan permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Kenya on the entity's behalf, following the OECD Model Treaty definition as applied under Kenyan domestic law and any applicable tax treaty.
Kenya has no specialized CFC rules, confirmed directly by PwC's current Kenya tax summary - entities managed and controlled in Kenya are simply treated as Kenyan resident entities instead, and thus taxed on worldwide income directly, achieving a similar practical effect for Kenyan-managed structures.
Kenya's interest-deductibility framework has evolved: an older rule restricted interest proportionally for foreign-controlled companies (excluding licensed financial institutions) where interest-bearing liabilities exceeded 3 times paid-up capital plus reserves/accumulated losses (with "control" for this purpose meaning 25%+ participation); more recent sources describe a 30% EBITDA-based interest cap now in place, consistent with BEPS Action 4-style reform. A separate "deemed interest" rule applies withholding tax to interest-free borrowings received by foreign-controlled Kenyan entities, based on Commissioner-prescribed rates.
Kenya does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Kenya does not have a comprehensive ATAD2-style anti-hybrid regime.
No foreign bank account or foreign financial asset reporting regime exists in Kenya requiring residents to separately disclose foreign accounts.
Kenya does not provide a broad participation exemption for foreign dividends in the European sense; foreign dividends received by a Kenyan company are generally taxable, with relief from double taxation available through Kenya's foreign tax credit system (per Section 16(2)(c) of the Income Tax Act, confirmed directly via the Kenya Revenue Authority's own guidance) rather than an outright exemption.
Kenya has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Kenya, capped at the Kenyan tax otherwise due on that income.
Kenya has 16 double tax treaties in force: Canada, Denmark, France, Germany, India, Iran, Norway, Qatar, Seychelles, Singapore (2025), South Africa, South Korea, Sweden, the UAE, the UK, and Zambia - per TaxAtlas and a dated 2026 specialist compilation confirming the same named list. Notably, there is no Kenya-US tax treaty; the DTA with Mauritius was suspended in March 2019.