🏛️ Corporate Income Tax in Kenya

Corporate Income Tax (CIT) is levied on the profits of companies operating in Kenya. All registered companies must file annual returns regardless of whether they made a profit or loss.

Company Type	Tax Rate
Resident Companies	30%
Non-Resident Companies (with PE in Kenya)	37.5%
Branches of Foreign Companies	37.5%
Newly Listed Companies (first 5 years)	25%
EPZ Enterprises (after 10 years)	25%

📅 Filing Deadline: Corporate income tax returns must be filed within 6 months after the end of the company's accounting year. For companies with December year-end, the deadline is 30th June.

📋 Documents Required

Audited Financial Statements - Balance sheet, P&L, cash flow
Tax Computation - Reconciliation of accounting profit to taxable profit
Capital Allowances Schedule - Depreciation for tax purposes
Related Party Transactions - Transfer pricing documentation
Installment Tax Receipts - Proof of quarterly payments
WHT Certificates - Tax deducted at source

📋 Step-by-Step Filing Guide

1

Prepare Financial Statements

Ensure your company's financial statements are audited (if required) and finalized. Companies with turnover above KES 300 million must have audited accounts.

2

Calculate Taxable Income

Prepare a tax computation reconciling accounting profit to taxable profit:

Start with accounting profit before tax
Add back disallowable expenses
Deduct exempt income
Apply capital allowances
Deduct any tax losses brought forward

3

Log in to iTax

Visit itax.kra.go.ke and log in with your company's KRA PIN and password.

4

Navigate to Returns

Click "Returns" → "File Returns" → Select "Income Tax - Company".

5

Complete the Return Form

Fill in all required sections:

Company details and accounting period
Income statement figures
Balance sheet summary
Tax computation details
Capital allowances claimed
Installment tax paid

6

Upload Supporting Documents

Attach required documents in PDF format:

Audited financial statements
Tax computation
Capital allowances schedule

7

Submit and Pay Balance

Review the return, submit, and pay any balance due via M-Pesa Paybill 572572.

💡 The system will credit installment tax already paid against the final liability.

✅ Allowable Deductions

The following expenses are deductible for corporate tax purposes:

Salaries, wages, and employee benefits
Rent for business premises
Interest on business loans
Bad debts (written off)
Repairs and maintenance
Professional fees (legal, audit, consultancy)
Insurance premiums
Advertising and marketing
Training and staff development
Contributions to registered pension schemes

❌ Non-Deductible Expenses

These expenses cannot be deducted:

Capital expenditure (use capital allowances instead)
Provisions for future expenses
Fines and penalties
Entertainment expenses (except staff welfare)
Donations to non-approved organizations
Personal expenses of directors/shareholders
Income tax and similar taxes

🏗️ Capital Allowances

Instead of accounting depreciation, companies claim capital allowances:

Asset Type	Rate	Method
Industrial Buildings	10%	Straight Line
Commercial Buildings	25%	Straight Line
Machinery & Equipment	12.5% - 37.5%	Reducing Balance
Motor Vehicles	25%	Reducing Balance
Computers & Software	30%	Reducing Balance
Furniture & Fittings	12.5%	Reducing Balance

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