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Taxes for expats in Kenya

Cheryl

Hello everyone,

When settling in and living in Kenya, you will also need to navigate the local tax system. In order to help newcomers and expats ease their tax-related experience, we would like to invite you to share your experience.

What are the taxes applicable to expats in Kenya?

Have there been any recent changes in tax regulations that expats should know about?

Are there any local tax incentives or agreements with your home country?

Have you come across any unexpected or unusual local tax?

What do you wish you had known earlier about taxes in Kenya?

Share your insights and experience.

Thank you for your contribution.

Cheryl
º£½ÇÂÒÂ× Team

See also

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Longonot62

Here goes, but please bear in mind that I’m not an expert:

Income tax is payable by all employees on income derived in Kenya,  whether resident or not. The rate starts at 10% on the first Kes 288,000, rising to a max 35% for income above Kes 9.6 million per annum  (information available on KRS website.


Withholding tax: 15% on savings interest, dividends, government bonds.  30% on rental income for non residents, 10% for residents.


Monthly Rental Income Tax:  7.5% on gross rent over Kes 280,000 per annum.  It’s possible to apply to be exempt in which case rental income will be added to annual income and taxed that way.


VAT:  16% except on zero rated items. Businesses supplying goods/services of over Kes 5 million per year must be registered.


There are a number of other more hidden taxes such as excise duty of 20% to 15% on phone and internet services (included within the monthly charges), tax on fuels, tax on car insurance.


Some countries have a dual tax agreement with Kenya, ie you won’t be taxed twice and some do not, ie: USA.

FrankLancs

I'm on a British pension that's already taxed, so I'm no intention of paying taxes again.

Longonot62

A double taxation agreement means that you would not be expected to pay tax twice on the same income, but under the UK/Kenya double taxation agreement, you should be paying tax in the country in which you reside.  A UK pension if subject to tax in the UK is also subject to tax in Kenya (at 5%) - according to the UK/Kenya agreement on double taxation.

FrankLancs

@Longonot62

Good info but I wouldn't even give them 1 percent.

My Kenyan wife already pays enough in her shop

peterg123

@FrankLancs

You don't have to. Kenmya is strictly a ource income tax  system. Your  foreign income, if not accrued in or derived from Kenya is exempt.

peterg123

º£½ÇÂÒÂ×s wishing to reside in Kenya without working here are entirely free of income  taxes on their non-Kenyan income. . It does not even have to be declared.   But will not be free of any income  earned in  Kenya.


This makes Kenya one of the lowet tax jurisdictions for retirees and non-working residents in the world. It's a little known fact. This is because the Kenya tax system is "source" taxed - a 2024 High  Court decision just re-inforced this and threw out the KR's attempt top grab foreign sourced income not "accrued" in Kenya or "derived" direct;ly from. Until the government changes the  colonial wording of the  Income Tx Act, which thery won't considering the massive investments top Kenyan VIPs have abroad.