Resident companies are taxable in Kenya on income accrued or derived from Kenya. Resident companies with business activities outside Kenya are also taxed on income derived from business activities outside of Kenya.
Non-resident companies are subject to Kenya Corporate Income Tax (CIT) only on the trading profits attributable to a Kenyan PE.
The rate of CIT for resident companies, including subsidiary companies of foreign parent companies, is 30%. The CIT rate for branches of foreign companies and PEs is 30%.
The Finance Act 2023 has introduced an income tax on the repatriated income for branches of foreign companies and PEs at a rate of 15%. Accordingly, the effective tax rate for permanent establishments and branches will now be 40.5% which is the same as that of an incorporated Kenyan company with non resident shareholders.
There are special rates for certain resident and non-resident companies as set out below.
|Entity||CIT rate (%)|
|Export processing zone (EPZ) enterprises:|
|First ten years||0|
|Next ten years||25|
|Registered unit trusts/Collective investment schemes||Exempt (subject to conditions)|
|Companies listed on securities exchange||25 (first five years)|
|Special economic zone (SEZ) enterprises, developers, and operators||10 (first ten years);
15 (succeeding ten years)
|Local motor vehicle assembly companies||15 (first five years);
15 (succeeding five years, subject to conditions)
|Company operating a carbon market exchange or emission trading system that is certified by the Nairobi International Financial Centre Authority||15 (first ten years from the year of commencement of its operations)|
Company operating shipping businesses
|15 (first ten years from the year of commencement of its operations)|
|Rates on gross income of non-residents derived from Kenya:|
|Transmission of messages||5|
|Ownership or operation of ships and aircraft||2.5|
Local income taxes
There are no county or provincial taxes on income, as all taxes are collected by the national government. However, county governments are empowered by the Constitution to impose property and entertainment taxes at the county level.