Kenya

Minimum Top Up Tax

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 […]
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Salvage Car

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 […]
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VAT

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 […]
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Value Added Tax

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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Deemed Interest

Deemed Interest

KRA recently via a public notice that provided deemed interest rate to be used for the last quarter of 2025 (October-December) set at 8%. Deemed interest applies when related-party loans or intercompany balances carry zero or below-market interest rates, triggering tax adjustments and withholding tax. KRA treats interest-free or long-overdue intercompany receivables as financing arrangements […]
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When Does the Burden of Proof Shift From Taxpayer to KRA?

When Does the Burden of Proof Shift From Taxpayer to KRA?

Commissioner of Investigations and Enforcement v Traneshvi Limited Income Tax Appeal E142 of 2023 (2025) Background Traneshvi Limited operates a real estate business generating rental income through 11-month renewable tenancy agreements. 2018: KRA conducted an audit covering tax years 2015-2017 which reconciled with the company’s declared rental income and verified claimed expenses. No issues were […]
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