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A KES 6.7 Billion Reality Check: Does Your Transfer Pricing Match Your Economic Substance?

In January 2026, Kenya’s Tax Appeals Tribunal delivered a monumental decision in the dispute between Del Monte Kenya Limited and Kenya Revenue Authority. The ruling offers valuable insight into how tax authorities approach transfer pricing enforcement and what multinational groups must do to remain compliant and defensible. Background KRA audited Del Monte Kenya’s transfer pricing […]

The Return of Nil Filings: Navigating the New Compliance Landscape Strategic guidance on the KRA’s reinstated yet intensified verification protocols.

KRA has reinstated nil returns filing on iTax following a temporary suspension. The suspension was a calculated system upgrade designed to transition the tax environment into an era of automated data verification. Key Takeaway: The ‘Nil Return’ option is no longer an automatic right; it is now a conditional privilege granted only after passing a […]

eTIMS and Data Driven Tax Validation- Navigating The Shift To Data Driven Income And Expense Verification

Overview of Shift Effective 1 Jan, 2026, KRA will systematically validate income tax returns against electronic datasets (eTIMS, withholding tax, customs). This is no longer just about VAT. It is an income tax control where expenses unsupported by eTIMS invoices risk being administratively disallowed. The move to eTIMS-based validation is a fundamental shift toward continuous, […]

Are your Bank Statements and Tax Returns coherent?

Rebecca Fashion (Kenya) Limited v Commissioner Investigations & Enforcement Tax Appeal E1331 Of 2024 | [2025] KETAT 278 (KLR) Background Rebecca Fashion (Kenya) Limited faced additional tax assessments totaling Kshs 106,300,709 following investigations by KRA covering the tax period 2018–2022. KRA spotted variances and inconsistencies between what Rebecca Fashion declared in tax returns and what […]

Are Your Interchange Fees Being Double-Taxed Without You Knowing It?

ABSA Bank Kenya PLC v. Commissioner for Domestic Taxes Supreme Court Petition No. 12 (E014) of 2022 Background KRA conducted a tax audit of Barclays Bank (now ABSA Bank Kenya PLC) covering 2007 to 2011. The audit raised two contentious withholding tax assessments: Payments to Card Companies: KRA assessed withholding tax on payments made by […]

High Court Ruling on Missing Traders & Burden of Proof

Commissioner of Domestic Taxes v Dinesh Construction Limited (2025) KEHC 17058 (KLR) Background In 2021, KRA audited Dinesh Construction Limited for the years 2016–2021 and flagged risks in corporation tax, VAT, PAYE and Withholding Tax. KRA issued a confirmed assessment claiming: Missing Traders: Dinesh claimed VAT inputs from suppliers who were “missing traders” entities that […]

Kenya’s New Minimum Top-Up Tax 2025 Draft Regulations: Practical Insights for Multinationals

Kenya is implementing the minimum top-up tax in line with a global effort to tackle tax avoidance by multinationals. This move follows the OECD/G20 Inclusive Framework aiming to ensure large multinational groups pay at least 15% tax in each jurisdiction where they operate. This tax reset means minimal effective tax rates replace loopholes that used […]

High Court Delivers Landmark Ruling on VAT & Insurance Salvage Sales

Commissioner of Domestic Taxes v ICEA Lion General Insurance Company Limited [2025] KEHC 14865 (KLR) Background This appeal arose from a compliance audit conducted by KRA on ICEA Lion General Insurance Company Limited. Following the audit, KRA issued a notice of assessment demanding additional taxes comprising of Corporation Tax and Value Added Tax, inclusive of […]

Landmark VAT Ruling in Kenya: Tribunal Confirms PSP Services Are VAT-Exempt

Kenswitch Limited v. Commissioner of Domestic Taxes Tax Appeal No. E1336 of 2024 Background The Tax Appeals Tribunal has delivered a landmark decision in favour of Kenswitch Limited, a licensed Payment Service Provider (PSP), holding that PSP commission income qualifies as VAT-exempt financial services under Paragraph 1(b) and 1(m) of the First Schedule to the […]

High Court Redefines VAT Liability for Digital Platform Operators

Commissioner of Domestic Taxes v Sendy Limited Income Tax Appeal E137 of 2024 Background Sendy Limited operates a digital marketplace connecting third-party transporters with customers who need delivery services earning commission income from transporters using its platform. Sendy won an appeal against an additional KRA VAT assessment at the Tax Appeals Tribunal finding that Sendy […]

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