- Kenya has enacted the Income Tax (Significant Economic Presence Tax) Regulations, 2026, replacing and revoking the 2020 Digital Service Tax Regulations.
- The SEP tax applies only to non-resident digital/service suppliers and is charged at an effective 3% of gross turnover, using a deemed 10% profit margin taxed at 30%.
- The previous KES 5 million turnover threshold has been removed, so all non-residents supplying qualifying services to Kenyan users are now in scope.
- The taxable services scope covers 14 categories and has been expanded to include areas such as artificial intelligence, online payments, and digital asset exchanges.
- Kenyan user location is determined using six alternative proxies, and the SEP tax is a final tax on the non-resident’s Kenyan-source income from those services.
Source: vatabout.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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