Kenya: Proposed reporting requirements for multinational entities

Proposal in the 2022-2023 budget statement

Proposal in the 2022-2023 budget statement

The budget statement for 2022-2023, presented 7 April 2022, includes a proposal that multinational enterprises (MNEs) with operations in Kenya would be required to report their activities both within Kenya and in other jurisdictions to the Kenya Revenue Authority. If enacted, this measure would increase the administrative reporting requirements for MNEs in Kenya.

This proposed change follows ratification and deposit of the “Multilateral Convention for Mutual Administrative Assistance in Tax Matters” with the Global Forum on Transparency and Exchange of Information on Tax Matters in July 2020. The convention entered into force on 1 November 2020. The multilateral convention provides an avenue for cooperation among countries regarding the assessment and collection of taxes and mainly deals with the exchange of information.

The proposal in the budget statement seeks to increase the number of MNEs required to submit reports about their operations to the tax authority—and thus is expected to result in greater tax transparency of MNEs through the exchange of information among the participating member countries. 

KPMG observation

With the proposed enhancement to the administrative reporting requirements for MNEs with a presence in Kenya, the measure could not only lead to increased compliance costs for reporting but also possible increased tax and transfer pricing audits by the tax authority.

Read an April 2022 report [PDF 2.18 MB] prepared by the KPMG member firm in Kenya

 

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