The Kenya Revenue Authority has invited the public and industry stakeholders to give their views on two key draft tax regulations that will shape how large corporations, especially multinationals, are taxed in Kenya.
In a notice dated November 3, 2025, the tax agency introduced the Draft Income Tax (Advance Pricing Agreement) Regulations, 2025, and the Draft Income Tax (Minimum Top-Up Tax) Regulations, 2025.
The call for comments by the Commissioner-General was on behalf of the Cabinet Secretary for the National Treasury and Economic Planning, in compliance with the Statutory Instruments Act and Article 201 of the Constitution that require public involvement before new laws or regulations come into force.
The first proposal is the Advance Pricing Agreement Regulations, which are meant to introduce an orderly system where taxpayers and KRA can agree in advance about the transfer pricing of transactions between related companies across borders. Such cross-border transactions form the centerpiece of many tax disputes, and this APA framework should help in reducing uncertainty and litigation for multinational firms operating in Kenya.
Once implemented, the regulations will allow qualified enterprises to enter into binding agreements that define how their cross-border related-party transactions are treated for tax purposes over a predetermined period.
The Finance Act 2025 introduced the APA framework under Section 18G of the Income Tax Act, which will come into operation on January 1, 2026. The Act allows KRA to enter into such agreements for a maximum period of five years, hence giving long-term certainty to investors.
Conversely, the authority reserves the right to revoke any agreement provided with any misrepresentation or false information.
The second proposal, the Minimum Top-Up Tax (MTT) Regulations, introduces a minimum effective tax rate for large multinational groups. This puts Kenya in step with ongoing global tax reforms that seek to have multinational corporations pay a fair share of taxes, irrespective of incentives or aggressive tax planning.
If a multinational pays below the required minimum rate in Kenya, the regulations provide for a “top-up tax” to make up the shortfall. It is aimed at combating profit shifting and improving revenue fairness between multinational companies with diverse global operations.
Under the Tax Laws (Amendment) Act 2024, the top-up tax applies to multinational groups with a consolidated annual turnover of at least EUR 750 million, approximately KES 104 billion, to ensure that they pay a minimum effective tax rate of 15% in Kenya.
KRA has published both draft regulations on its official website and invited written feedback from individuals, companies, and professional bodies by December 2, 2025. Submissions can be sent to the Commissioner-General at KRA headquarters in Nairobi or via email.
“Please channel your submissions to the Commissioner General, Kenya Revenue Authority, PO Box 48240-00100, Nairobi or by email to [email protected] to be received on or before Tuesday, 2nd December, 2025,” KRA directed.
The taxman has called on businesses, accounting professionals, and multinational corporations to carefully review the drafts, noting that new regulations are going to significantly impact cross-border trade structuring, tax-risk planning, and compliance obligations.
Once the consultations close, KRA and the National Treasury will review the feedback, make the necessary revisions, and issue final regulations. The authority encouraged companies to prepare early and align their operations with the new requirements ahead of implementation in 2026.
