How corporate tax works in Kenya
Kenya taxes resident companies on worldwide income at 30% and non-resident branches at 37.5%. No county corporate surcharge exists.
Export zones give ten tax-free years then 25% for a decade, while special zones run 10% then 15% across twenty years with dividend and duty relief. Both need licences and substance.
Small traders between KES 1 million and 25 million turnover face turnover tax instead of corporate tax. Minimum tax was repealed after courts struck it down.
Tax rates at a glance
- Resident rate
- 30%Standard
- Branch rate
- 37.50%
- SEZ decade two
- 15%
- Turnover band
- KES 1M - 25M
- Investment deduction
- 100%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
FoundersHolding companiesRegional operatorsInvestorsCross-border groups
Watch out for
- Turnover-tax rates conflict across sources. KRA's page cites 1.5% while Big-4 summaries cite 3% — confirm on kra.go.ke before filing.
- Zone holidays need real operations. Paper registrations without licensed activity, exports and employment fail incentive audits.
- Branch versus subsidiary is a 7.5-point choice. The 37.5% branch rate makes local incorporation the default for permanent operations.
- Digital presence is now SEPT at 3% effective. The old 1.5% digital-services tax is repealed — marketplaces file significant-presence tax instead.
Frequently asked questions
Does Kenya have corporate tax?
Yes, 30% for resident companies and 37.5% for branches, with long zone holidays and turnover tax for small traders.
What holidays do Kenyan zones offer?
Export zones give ten tax-free years then 25% for a decade; special zones run 10% then 15% across twenty years.
Is there minimum tax in Kenya?
No. The 1% minimum was held unconstitutional and repealed, leaving no minimum tax in 2026.