ADVOKS GLOBAL · KENYA
Income Tax Act
3. Charge of tax
Edition: 2026-07-01 · In force
3. Charge of tax
(1)Subject to, and in accordance with, this Act, a tax to be known as income tax shall be charged for each year of income upon all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.(2)Subject to this Act, income upon which tax is chargeable under this Act is income in respect of–(a)gains or profits from–(i)any business, for whatever period of time carried on;(ii)any employment or services rendered;(iii)any right granted to any other person for use or occupation of property;(b)dividends or interest;(c)(i)a pension, charge or annuity; and(ii)any withdrawals from, or payments out of, a registered pension fund or a registered provident fund or a registered individual retirement fund; and(iii)any withdrawals from a registered home ownership savings plan;(ca)income accruing from a business carried out over the internet or an electronic network including through a digital marketplace;(e)an amount deemed to be the income of any person under this Act or by rules made under this Act;(f)gains accruing in the circumstances prescribed in, and computed in accordance with, the Eighth Schedule;(g)subject to section 15(5A), the net gain derived on the disposal of an interest in a person, if the interest derives twenty per cent or more of its value, directly or indirectly, from immovable property in Kenya;(h)a natural resource income; and(i)gains from financial derivatives, excluding financial derivatives traded at the Nairobi Securities Exchange.(2A)The Cabinet Secretary shall make regulations to provide for the mechanisms of implementing the provisions of subsection (2)(ca).(3)For the purposes of this section–(a)"person" does not include a partnership;(b)a bonus or interest paid by a designated cooperative society, as defined under section 19A, shall be deemed to be a dividend;(ba)"digital marketplace" means an online or electronic platform which enables users to sell or provide services, goods or other property to other users;(c)for the purposes of subsection (2)(g) and section 15(5A) –(ii)"net gain" in relation to the disposal of an interest in a person, means the consideration for the disposal reduced by the cost of the interest; and(iii)the terms "consideration", "cost", "disposal", "interest in a person", "mining information", "mining right", "person", "petroleum agreement", and "petroleum information" have the meaning assigned to them in the Ninth Schedule.Case law referring to this provision