Kenya

Corporate - Tax credits and incentives

Last reviewed - 26 September 2022

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

The Finance Act, 2022 has reintroduced the 150% investment deduction allowance to projects where the cumulative investment value for the preceding four years from the date the provision came into effect or the cumulative investment for the succeeding three years outside Nairobi County or Mombasa County is at least KES 2 billion.

Export processing zone (EPZ)

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

Special economic zones (SEZs)

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 CIT rates.