On 3 November 2025, the Kenya Revenue Authority (KRA), acting on behalf of the Cabinet Secretary for the National Treasury and Economic Planning, issued the draft Income Tax (Advance Pricing Agreement) Regulations, 2025 for public consultation.
These Regulations, issued under Section 18G(5) of the Income Tax Act CAP 470, provide the operational framework for implementing Advance Pricing Agreements (APAs), which officially come into effect on 1 January 2026 through the Finance Act, 2025.
An APA is a formal arrangement between a taxpayer and the tax authority that pre-establishes the transfer pricing methodology for controlled transactions over a specified period. It offers clarity, reduces the risk of disputes, and aligns with international standards, including the OECD framework and BEPS Action 14 on effective dispute resolution.
The draft Regulations represent a major step toward formalizing Kenya’s APA regime. Stakeholders are invited to review and comment on the proposed framework before it is finalized.
We’ve summarized the key highlights of the draft APA Regulations on the document in the button below for your reference and consideration.
Should you have any questions or require support in understanding the implications of these Regulations, please feel free to reach out to our tax team.
