Wednesday, July 19, 2017

Corporate Income Tax Rates

The following are the corporate income tax rates in Kenya as at July 2017:

Type Tax Rate
Resident company 30%
Non-resident company (branches) 37.5%
Person with gross business income whose turnover does not exceed 3%
Kshs 5 million pa. (from 1 January 2008)
3%
Newly listed company (NLC) 27%, 25% & 20%*
Export Processing Zone enterprises:
  • First ten years
  • Next ten years
N/A
25%
Special Economic Zones Enterprise, Developer and operator:


  • First ten years
  • Subsequent ten years
10%
15%
Tax on residential rental income (income below KShs144,000 per year) NIL
Residential rental income tax (income above KShs 144,000 pa but not exceeding Kshs. 10 million per year) 1O % of the gross rental income**
Tax on residential rental income (income above Kshs.10 million pa.) Normal taxation rates (individual rates or corporate rate for companies)
Company that has constructed at least 400 affordable approved housing units in a year 15%


*The 27% rate applies where at least 20% of the issued share capital listed for NLC listed after 1st January 2002 for 3 years following the year of listing; 25% (at least 30% issued share capital listed) for those listed after 1 January 2003 for five years following the year of listing; and 20% (at least 40% issued share capital listed) for those listed after 1st January 2006 for five years, following the year of listing.

*25% for SMEs that introduce their shares at the stock exchange.

** A taxpayer may elect to the Commissioner to opt out of the residential rental income tax rate of 10% on gross rental receipts, Where the taxpayer opts out of the residential rental income tax, normal rates of taxation will apply. That is, 30% of the taxable profits if the taxpayer is a body corporate or tax at the individual rates of tax if the taxpayer is an individual.

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