Companies must file their annual tax returns, together with all supporting schedules and the original financial statements, before 1 May each year or four months from the financial year end.
The tax return should be signed by the taxpayer. Taxpayers can file a request to extend the due date of filing the tax return provided they pay an estimated amount of tax. The request must be filed at least 15 days before the due date and the estimated tax due must also be paid before the due date.
The extended period can be up to 60 days.
An amended tax return can be filed within 30 days from the due date. Any tax due must be paid when the tax return is filed. A late penalty is applied at the rate of 2% plus the credit and discount rate issued by the Central Bank of Kenya as of January each year.
The law has set up appeals committees at two levels the Internal Committee and the Appeal Committee. The Appeal Committees decision is final and binding on the taxpayer and the tax department unless a case is appealed by either to the court within 30 days of receiving the decision, which is usually in the form of an assessment.
Otherwise the following are the procedure to follow in apply for a Corporate profit tax and Gains tax.
- Go to the Office of General Directorate of Taxes at the Kenya Revenue Authority.
- Bring the required documents.
- Present the documents.
- You will be asked to wait while your documents are being processed.
- You will be called to the cashier to pay the application fee and necessary tax.
- Pick up your corporate profit tax certificate.
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The registration requirements are as follows:
- A copy of certificate of incorporation.
- List of staff and their annual salaries.
- The Directors Tax Clearance Certificates (now Electronic Tax Clearance Certificate)
- Letter of application for registration,
Office Locations & Contacts
Kenya Revenue Authority
Times Tower, 19th Floor, Haile Selassie Avenue
P.O. Box 30742 Tel. 310900, Fax 315987 Nairobi, Kenya.
Web site: http://www.kra.go.ke
All Kenyan corporations both private and government institution are entitled to corporate profit tax and gains tax.
Nature of tax Rate
- Corporate income tax up to net profit 10,000,000 20%
- Corporate income tax net profit over 10,000,000 25%
- Capital gains tax 20%
- Branch tax 20%
- Dividends 0%
- Interest 20%(1)
- Royalties from patents, know-how, etc. 20%(1)
- Certain services provided from non-resident entities 20%(1)
- Branch remittance tax 0%
Net operating losses (years)
- Carry back 3 years
Losses incurred in long-term projects can be carried back within the same project with no limits.
- Carry forward 5 years
- Final tax imposed on gross payments. The rate may be reduced under a tax treaty.
valid for 1 year.
processing is 14 days
The Kenyan corporation must register for a Corporate Tax on their Profits derived from Kenya, as well as be familiar with the rules relating to the filing of Corporate tax and How gains tax is calculated.
- Name of Taxpayer
- Taxpayer Identification Number
- Business Name or Trade Name of Taxpayer
- Bank Details
- Name of Bank
- Bank branch
- Account Number
- Type of Employment
- Total Income Chargeable Income Total Tax Payable
- Details of Salary paid and Person relief tax deducted from Employees
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Need for the Document
Kenya corporations are subject to corporate profits tax on their profits derived from Kenya, as well as on profits derived from abroad, unless the foreign activities are performed through a permanent establishment located abroad. Foreign companies resident in Kenya are subject to tax only on their profits derived from Kenya. Oil prospecting and production companies are subject to tax on their profits at a rate of 30.%. The Insurance Companies in Kenya ,Kenya Petroleum Company (KPC)and Central Bank of Kenya are subject to tax on their profits at a rate of 30%.