Kenya

Kenya-incorporated companies are treated as Kenyan-tax resident. Additionally, companies incorporated overseas are also treated as Kenya resident if their ‘management and control is exercised in Kenya in a particular year of income under consideration’. A company may also be declared a tax resident in Kenya pursuant to a declaration in a legal notice by the Cabinet Secretary for the National Treasury.

Permanent establishment (PE)

A business carried on in Kenya through a fixed place of business gives rise to a PE, as does a building site, or a construction or assembly project, that has existed for six months or more.

The definition of a PE is extended to include a dependent agent that habitually concludes contracts on behalf of others.

The Finance Act, 2023 expanded the definition of PE to include a service PE concept. The new definition also excludes certain activities that are preparatory and auxiliary in nature from creating a PE. In addition, the new definition of the fixed place of business PE lacks a threshold as to how long a business must be operating in Kenya to create a PE.