Corporate - Tax credits and incentives

Last reviewed - 26 February 2020

Foreign tax credit

There is no tax credit for foreign tax paid on business income except as provided for by a DTT (if applicable) between Kenya and the other country. However, foreign tax paid may be deducted as an expense.

Investment deduction

Qualifying investments exceeding KES 200 million incurred outside Nairobi or the municipalities of Mombasa or Kisumu are allowed an investment deduction of 150%. All other qualifying investments are allowed a 100% investment deduction in the year the asset is put into use.

Export processing zone 

Companies located in an approved  Export Processing Zone (EPZ), principally to export goods, are taxed at a 0% CIT rate for ten years from its commencement and at a rate of 25% for the next ten years.

Special economic zones 

Special Economic Zones (SEZ) enterprises are not required to register for VAT. The supply of goods or taxable services to an SEZ is subject to VAT at 0% (zero rated).(see the Taxes on corporate income section for the rates).

Listed companies

Companies listed on the Nairobi Securities Exchange are entitled to reduced rates of income tax for a period depending on the percentage of share capital listed (see the Taxes on corporate income section for the rates).