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20 August 2025

Kenya provides payment timeline for minimum top-up tax

  • The Finance Act, 2025, gazetted on 27 July 2025, establishes a payment timeline for the Domestic Minimum Top-Up Tax (DMTT), which is due by the end of the fourth month after the end of the year of income.
  • Effective from 1 July 2025, the DMTT will be payable alongside the balance of tax payments, ensuring that multinational groups with consolidated revenues of at least €750m meet a minimum effective tax rate of 15% in Kenya.
  • For the financial year ending 31 December 2025, the DMTT will be due by 30 April 2026.
  • Affected entities should prepare to meet the statutory deadline for DMTT payments and ensure their tax planning aligns with the new requirements.
 

Executive summary

Kenya's Finance Act, 2025, which was gazetted on 27 July 2025, provides a timeline for payment of the Domestic Minimum Top-Up Tax (DMTT) introduced under the Tax Laws (Amendment) Act, 2024. The tax will be payable by the end of the fourth month after the end of the year of income, alongside the balance of tax payment.

Detailed discussion

Background

Through the Tax Laws (Amendment) Act, 2024, Kenya introduced a DMTT effective 1 January 2025 that is applicable to multinational groups with consolidated revenues of at least €750m. This is meant to ensure that such groups pay a minimum effective tax rate (ETR) of 15% in Kenya and aligns with the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) Pillar Two.

The 2024 law provided for the computation and scope of the DMTT, but did not designate the payment timeline for DMTT.

Highlights

The Finance Act, 2025, effective 1 July 2025, amended Section 12G of the Income Tax Act (ITA) by indicating that the tax shall be payable by the end of the fourth month after the end of the year of income.

For a financial year ending 31 December 2025, the DMTT (if applicable) will be due by 30 April 2026.

Implications

The timeline provides certainty and administrative fairness. In-scope taxpayers should prepare accordingly to meet the statutory deadline for DMTT payments.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young (Kenya), Nairobi

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2025-1731

 

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