Kenya: Legislation replacing digital services tax with significant economic presence tax, implementing Pillar Two rules
Legislation also includes withholding tax and VAT changes
The president in December 2024 signed into law the Tax Laws (Amendment) Bill 2024 and the Tax Procedures (Amendment) Bill 2024, which:
- Establish a significant economic presence tax, replacing the 1.5% digital services tax
- Introduce a minimum top-up tax for multinational enterprises (MNEs) in line with the Pillar Two rules
- Introduce withholding taxes on payments in the digital marketplace
- Amend certain value added tax (VAT) rules
- Amend the excise duty rules to include excisable services provided by nonresidents through digital platforms (read TaxNewsFlash)
For more information, contact a KPMG tax professional in Kenya:
Lydia Abala | labala@kpmg.co.ke