Kenya: Key measures proposed in Finance Bill 2023 and implications for non-residents and Digital Asset
The Kenyan Parliament’s Lower House (National Assembly) has accepted for consideration Bill No. 14, known as The Finance Bill, 2023, which proposes significant measures with implications for non-residents and digital assets.
Taxation Definitions and Foreign Exchange Losses
- Introduction of new taxation definitions.
- Deferral of foreign exchange losses for a maximum of three years from the realization date.
Taxation of Repatriated Income and Digital Assets Tax
- Taxation of repatriated income from non-residents conducting business in Kenya through a permanent establishment.
- Implementation of a 3 percent digital assets tax on income derived from the transfer or exchange of digital assets.
Deductions and Reporting Obligations
- Allowance of a 100 percent deduction for the cost of loose tools and utensils.
- Introduction of CbC reporting obligations for both resident and non-resident companies.
VAT Registration, Exemptions, and Amnesty Regime
- Requirement for VAT registration of persons supplying imported digital services over the internet.
- Exemption of exportation of taxable services and the transfer of business from Value Added Tax (VAT).
- Introduction of various income tax exemptions and deductions for both residents and non-residents.
- Implementation of a tax amnesty regime.
Source: parliament.go.ke
