A landmark deadline is approaching for large multinational corporations operating in Kenya. By April 30, 2026, qualifying companies are required to make their first payment under Kenya’s Domestic Minimum Top Up Tax. The policy is designed to ensure that large multinationals do not pay an effective tax rate below 15 percent on profits earned within the country.
Kenya’s Finance Act, 2025, which was gazeted on July 27, 2025, set out the payment timeline for the tax. The law requires that the Domestic Minimum Top Up Tax be paid by the end of the fourth month after the close of a company’s financial year. For businesses with a December 31 year end, this places the first payment deadline on April 30, 2026.
The framework builds on earlier legislative changes. Through the Tax Laws Amendment Act, 2024, Kenya introduced the Domestic Minimum Top Up Tax as part of efforts to align with the OECD and G20 Inclusive Framework on Base Erosion and Profit Shifting, commonly referred to as BEPS Pillar Two. The global initiative aims to address profit shifting and ensure that multinational companies pay a minimum effective tax rate of 15 percent in the jurisdictions where they operate. The Kenyan law took effect on December 27, 2024.
The tax does not apply to all companies. It targets entities that are part of multinational enterprise groups with consolidated annual revenues of at least 750 million euros. This threshold is assessed over a four year period, with companies required to meet it in at least two of the preceding four years.
Under the rules, if a multinational’s effective tax rate in Kenya falls below 15 percent, it must pay an additional amount to make up the difference. This top up mechanism is intended to reduce the use of tax planning strategies that lower taxable income in high tax jurisdictions.
The policy has, however, faced some challenges. Following an agreement negotiated by United States President Donald Trump, certain American companies have been granted exemptions from the minimum corporate tax requirements. This development may affect the potential revenue that the Kenya Revenue Authority (KRA) had anticipated from large United States based firms operating in Kenya.
Despite this, the introduction of the Domestic Minimum Top Up Tax reflects Kenya’s broader effort to strengthen its tax framework and limit profit shifting by multinational corporations. It also aligns the country with global tax standards that are being adopted across multiple jurisdictions.
For companies that fall within the scope of the law, the April 30, 2026 deadline represents a key compliance requirement. Businesses are expected to assess their effective tax rates and ensure that any additional tax obligations are settled within the prescribed timeline.
