Investing in Kenya
The law requires a person (resident or non-resident) who derives income from Kenya or in the case of a resident person, from outside Kenya but which falls within the above provisions, to declare and pay tax on that income.
Taxes that are payable by a Foreign Investor:
Direct taxes are imposed on the income of a person, and these include income taxes such as:
Income from the provision of services through a business carried out over the internet or an electronic network including through a digital market place. It is only payable by nonresidents. The due date for filing the returns is on or before 20th of the following month.
Individual Income Tax Tax on individual earnings whether business, employment, hobbies or other ventures. However, the law provides for relief of tax paid abroad by Kenyan citizens with respect to employment income, income from entertainment, athletes and sportsmen subject to tax payable in Kenya. Proof of the tax paid abroad is paramount. The returns are filed annually and the due date for the individual return is 30th June every year.
Tax on employment income; taxed on graduated scale and returns are filed monthly on or before 9th of the following month.
Tax on rental income can take the form of monthly rental income which is 10% of gross rent (for residents only) or annual income tax regime where deductions are allowed depending on the whether the rent earned is 15M per year of more.
Withholding Income Tax on gross rental income for nonresidents is 30%. The due date for filing Monthly Rental Income (MRI) is 20th of the following month while the annual tax return is due by 30th June every year.
Corporate Income Tax
30% for resident companies & 37.5% for non- residents. The returns are due within six months after the end of the financial year.
Turnover Tax Tax on income of small and micro enterprises with a gross turnover of Kshs.1M to Kshs. 50M Per annum. The rate is 1% of Gross Turnover. Turnover tax returns are due on or before 20th of the following month.
Tax gains earned on the transfer of property are charged at 5% of the gains made.
Withholding Income Tax is tax withheld at source. A person making certain payments deducts tax, at the applicable rate, and remits the tax to the Commissioner on behalf of the payer. Follow this link for more details on withholding tax; https://kra.go.ke/en/ helping-tax-payers/faqs/more-about-withholding-tax
Indirect taxes are imposed on consumption such as Value Added Tax (VAT) and Excise Duty (varies depending on the excisable product/service).