By FNJ & Associates | Last updated: 30 October 2026
Corporate tax in Kenya, 2026. Resident companies and branches of non-resident companies pay corporate income tax at 30% of taxable profit, with lower rates for EPZ and SEZ enterprises and some other sectors. Tax is paid in instalments on the 20th of the 4th, 6th, 9th and 12th months, any balance within four months of year end, and the return is due within six months.
New to Kenyan taxes? Start with our overview of the types of taxes in Kenya, with every main rate and deadline in one table.
Corporate income tax is the main tax on company profits in Kenya. This guide covers who is taxed, the standard and special rates, the incentives available to qualifying investors, the main deduction rules, and the compliance calendar, reflecting the Tax Laws (Amendment) Act, 2024 and the Finance Acts of 2025 and 2026. For the filing process itself, see our guide to corporate income tax returns in Kenya.
Who pays corporate income tax in Kenya?
Resident companies, including Kenyan subsidiaries of foreign groups, are taxed on income accrued in or derived from Kenya, and on income from business carried on outside Kenya. A company is resident if it is incorporated in Kenya, if its management and control are exercised in Kenya, or if the Cabinet Secretary declares it resident.
Non-resident companies are taxed on profits attributable to a permanent establishment in Kenya, such as a branch or office. Other Kenyan-source income of non-residents, such as dividends, interest, royalties and fees, is generally taxed through withholding tax, explained in our withholding tax guide.
Standard corporate income tax rates
| Taxpayer | Rate |
|---|---|
| Resident company | 30% |
| Non-resident company with a permanent establishment (branch) | 30% |
Special rates and incentives
Kenya offers reduced rates to encourage investment in particular sectors and zones. Each regime has conditions, and most require certification or approval before the reduced rate can be applied.
| Entity | Rate |
|---|---|
| Export Processing Zone (EPZ) enterprises | 0% for the first 10 years, 25% for the next 10 years, then 30% |
| Special Economic Zone (SEZ) enterprises, developers and operators | 10% for the first 10 years, 15% for the next 10 years |
| Start-ups certified by the Nairobi International Financial Centre Authority (Finance Act, 2025) | 15% for the first 3 years, 20% for the next 4 years |
| Nairobi International Financial Centre companies meeting the investment conditions | 15% for the first 10 years, 20% for the next 10 years |
| Local motor vehicle assemblers | 15% for the first 5 years, extendable for a further 5 years where conditions are met |
| Companies operating a carbon market exchange or emissions trading system certified by the Nairobi International Financial Centre Authority | 15% for the first 10 years |
| Companies operating a shipping business | 15% for the first 10 years |
| Registered unit trusts and collective investment schemes | Exempt, subject to conditions |
The Finance Act, 2026 repealed the 15% rate previously available to developers of affordable housing schemes, with effect from 1 July 2026. Developers that planned projects around that rate should revisit their tax projections.
Rates on gross income for certain non-residents
Some non-resident businesses are taxed on gross income rather than profit:
- Transmission of messages by cable, radio, optical fibre, television broadcasting or satellite: 5%.
- Ownership or operation of ships and aircraft: 2.5%.
- Demurrage charges: 2.5%.
Non-residents that provide services through the internet or an electronic network to users in Kenya pay Significant Economic Presence tax, which replaced the Digital Service Tax from 27 December 2024 and works out at an effective rate of 3% of gross turnover. The Finance Act, 2025 widened it to all such services and removed the former KES 5 million threshold.
Minimum taxes for large groups
The old minimum tax of 1% of gross turnover, which the courts had declared unconstitutional, was formally repealed by the Finance Act, 2025. Separately, the Tax Laws (Amendment) Act, 2024 introduced a domestic minimum top-up tax for members of multinational groups with consolidated annual revenue of at least EUR 750 million. Where the group’s effective tax rate in Kenya falls below 15%, a top-up tax brings it up to that level, in line with the OECD global minimum tax rules.
Deduction and loss rules
- Losses: since the Finance Act, 2025, tax losses can be carried forward for a maximum of five years. The Finance Act, 2026 kept the limit, with a narrow exception for taxpayers that had invested at least KES 10 billion before 1 July 2025.
- Expenses and eTIMS: business expenses must generally be supported by electronic tax invoices to be deductible, and KRA now checks declared expenses against eTIMS, withholding tax and customs data.
- Capital allowances: capital expenditure is not deducted directly but through investment deductions and wear and tear allowances at the rates in the Second Schedule to the Income Tax Act.
- Anti-avoidance: the Finance Act, 2026 introduced a new general anti-avoidance rule in the Tax Procedures Act, allowing KRA to disregard arrangements entered into mainly to obtain a tax advantage.
- Transfer pricing: transactions with related parties must be priced at arm’s length and documented, and the Finance Act, 2026 updated the documentation rules for country-by-country reports, master files and local files.
Capital gains on the sale of property and shares
Gains on the transfer of property situated in Kenya, including land, buildings and unlisted shares, are subject to capital gains tax at 15%. The Finance Act, 2026 extended capital gains tax to non-residents that sell shares in foreign entities deriving value from Kenyan assets.
Compliance calendar
- Instalment tax: four instalments, due on the 20th day of the 4th, 6th, 9th and 12th months of the accounting year. For a December year end: 20 April, 20 June, 20 September and 20 December.
- Balance of tax: due by the last day of the 4th month after the year end.
- Annual return: due within six months after the year end, so 30 June for a December year end.
- Penalties: late filing attracts KES 20,000 or 5% of the tax due, whichever is higher; late payment attracts 5% of the tax due, and interest runs at 1% per month on unpaid tax.
Companies with historical arrears can benefit from the tax amnesty reinstated by the Finance Act, 2026, which waives interest, penalties and fines for periods up to 31 December 2025 where the principal tax is paid by 31 December 2026. See KRA’s summary of taxes for companies and partnerships for the official overview.
Frequently Asked Questions
What is the corporate tax rate in Kenya?
30% for resident companies and for branches of non-resident companies. Reduced rates apply to qualifying EPZ, SEZ and some other enterprises.
When is corporate tax paid in Kenya?
In four instalments on the 20th of the 4th, 6th, 9th and 12th months of the financial year, with any balance within four months of year end.
Do small companies pay corporate tax?
Yes, unless they qualify for and choose turnover tax, which is 1.5% of gross sales for businesses with turnover of more than KES 1 million and up to KES 25 million.
Is corporate tax the same as corporation tax?
Yes. Kenya’s law calls it corporate income tax; “corporation tax” and “company tax” mean the same thing.
How FNJ & Associates can help
FNJ & Associates prepares corporate tax computations and returns, instalment tax schedules, transfer pricing documentation and incentive applications, and supports clients through KRA reviews and audits. Read more about our firm, visit our tax and KRA services page, or email [email protected]. If you run a small or growing business, see our accounting services for SMEs in Kenya.
Disclaimer
This article is general information based on Kenyan tax law and KRA guidance as at 23 October 2026. It is not tax, legal or financial advice, and rates, thresholds and deadlines change, often through the annual Finance Act. Confirm the current position with KRA or speak to FNJ & Associates before acting. FNJ & Associates accepts no liability for decisions made on the basis of this article.