Kenya: Tax changes in Finance Act 2025

APAs for nonresident businesses; VAT exemptions for certain services; digital asset tax changes

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July 28, 2025

The Finance Act 2025 has enacted certain tax changes that were proposed in the Finance Bill 2025 (read TaxNewsFlash), including:

  • Advance pricing agreements (APAs) for nonresident businesses
  • Value added tax (VAT) exemptions for services provided by the Defence Forces Welfare Services
  • Zero-rated packaging materials for tea and coffee
  • Increased per diem benefit from KES 2,000 to KES 10,000
  • Carrying forward tax losses limited to five years
  • Digital assets tax repealed and replaced by a 10% excise duty on virtual asset transaction fees

Read a July 2025 report (68 pages) prepared by the KPMG member firm in Kenya

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