Kenya is an increasingly popular destination for digital nomads, expats, and location-independent workers seeking to enjoy the vibrant culture, beautiful landscapes, and favorable climate. If you're considering making Kenya your tax residency, here's a comprehensive step-by-step guide to help you navigate the process.
Step 1: Understand the Definition of Tax Residency
In Kenya, an individual is considered a tax resident if they have a permanent home in Kenya and were present in the country for any period during the tax year, or if they were present in Kenya for 183 days or more in aggregate during the tax year, or if they were present for an average of 122 days in the tax year and the two preceding tax years.
Step 2: Obtain a Visa or Work Permit
To establish tax residency, you must first ensure that you have the legal right to reside in Kenya. This typically involves obtaining a visa or work permit. The type of visa or permit you need will depend on your specific situation, such as whether you are employed by a Kenyan company or working independently.
Step 3: Establish a Permanent Home in Kenya
To be considered a tax resident, you must have a permanent home in Kenya. This could be a rented apartment, a house you own, or any other form of long-term accommodation. Ensure that you have proper documentation, such as a lease agreement or property ownership documents.
Step 4: Maintain Physical Presence
You must meet the physical presence requirement to qualify as a tax resident. This means you should be present in Kenya for at least 183 days in a tax year or meet the average of 122 days over three years rule. Keep a record of your travel dates and ensure that you comply with these requirements.
Step 5: Register with the Kenya Revenue Authority (KRA)
Once you have met the physical presence requirement, you need to register with the Kenya Revenue Authority (KRA). This involves obtaining a Personal Identification Number (PIN) which is essential for tax purposes. You can apply for a PIN online through the KRA's iTax portal.
Step 6: File Tax Returns
As a tax resident, you are required to file annual tax returns with the Kenya Revenue Authority. Ensure that you report all your income, both from within and outside Kenya. Keep accurate records of your earnings and expenses to facilitate this process.
Step 7: Stay Informed about Your Tax Obligations
Tax laws and regulations can change, so it is important to stay informed about your tax obligations as a resident of Kenya. Regularly check for updates from the Kenya Revenue Authority and ensure that you remain compliant with all tax requirements.
Legal References
- Income Tax Act (Cap 470)
- Kenya Revenue Authority (KRA) Guidelines
- Immigration Act
Useful Links
