June 30, 2023
Kenya rolls out new tax return template to capture data on intercompany transactions for MNEs
The Kenya Revenue Authority (KRA) has rolled out a new tax return template that expands the scope of compliance for taxpayers, requiring them to disclose related-party transactions. This change is aligned with efforts to curb Base Erosion and Profit Shifting (BEPS) by multinational enterprises operating in Kenya.
To keep pace with global tax changes, Kenya has made efforts to adopt BEPS Pillar 13 action points, which promote transfer pricing documentation. The culmination of the efforts has been exhibited in Kenya's introducing country-by-country reporting (CbCR) and signing a Multilateral Competent Authority Agreement for Exchange of country-by-country (CbC) reports.
The updated tax return template seeks to gather the following information for entities with related parties outside Kenya:
Implications for taxpayers
Taxpayers should align their transfer pricing transactions with local rules and the Organization for Economic Co-operation and Development (OECD) Guidelines to mitigate the risk of transfer pricing adjustments.
For additional information with respect to this Alert, please contact the following:
Ernst & Young (Kenya), Nairobi
Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor