Kenya: Tax changes in Finance Act 2025
APAs for nonresident businesses; VAT exemptions for certain services; digital asset tax changes
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- Digital assets tax repealed and replaced by a 10% excise duty on virtual asset transaction fees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