Transfer pricing - Kenya
Kenya introduced transfer pricing rules in 2006 to supplement the provisions of section 18(3) of the Income Tax Act (ITA) 2006, Chapter 470, as amended by Income Tax Rule, 2012 and Income Tax Rule, 2014. The arm’s length principle is laid down in these rules.
Section 18(3) of the ITA states that transactions between a non-resident person and a related resident person should be at arm’s length.
The Kenya Revenue Authority (‘KRA’) has proposed to introduce detailed transfer pricing practice notes. To date, they have not yet been published.
In addition to the rules laid down in section 18(3) of the ITA, the KRA applies the 2017 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Guidelines) and the UN Transfer Pricing Manual (UN TP Manual).