Corporation Tax Calculator Kenya 2026

What corporation tax is

Corporation tax is the income tax a company pays on its profits. For a resident company the rate is 30%. It is charged on taxable profit, which is rarely the same as the profit in the accounts. The accounts follow accounting standards, while tax follows the Income Tax Act, and the two treat some items differently. The job of a tax computation is to bridge the gap.

From accounting profit to taxable profit

The calculator follows the standard layout of a tax computation:

1. Start with profit before tax from the income statement.
2. Add back disallowable expenses: items the Act does not allow as deductions. Common examples are depreciation, entertainment, fines and penalties, donations to unapproved bodies, private expenses of owners and provisions that are not yet allowable.
3. Deduct capital allowances and other allowable items that the accounts do not include, such as wear and tear on equipment and allowable deductions for qualifying investment. The capital allowances calculator can produce the figure.
4. The result is the adjusted profit.
5. Deduct tax losses brought forward from earlier years, within the time limits the law sets. If the result is below zero, there is no tax and a new loss carries forward.
6. Apply the tax rate to the taxable profit.
7. Subtract tax already paid: instalment tax and withholding tax credits. The balance is what you pay with the return, or a credit if you have overpaid.

A worked example

A company with profit before tax of KES 1,000,000, disallowable expenses of KES 200,000, capital allowances of KES 100,000 and losses of KES 50,000 brought forward has taxable profit of KES 1,050,000. The corporation tax is KES 315,000.00. After KES 100,000 of tax already paid, the balance payable is KES 215,000.00.

Non-resident companies

A company that is not resident in Kenya but earns income through a permanent establishment is taxed on that income at the rate held for non-residents. Other Kenyan income of non-residents is generally dealt with through withholding tax, which is final. Residence is a legal test, so confirm it before you use the resident rate.

Payment and filing

Companies pay tax in instalments during the year, usually four instalments based on estimated tax, and the balance is due by the last day of the fourth month after year end. The return is filed on iTax by the company's authorised person, using its own login. Late filing and late payment attract penalties and interest. The instalment tax calculator and the penalty calculator on this site cover both.

Special rules to be aware of

The Income Tax Act has special regimes and rates for some businesses: for example, newly listed companies, companies operating in special economic zones, and businesses in certain sectors. Minimum tax and other provisions have been introduced and changed over time. This calculator applies the general rate only and does not apply any special regime.

Getting the adjustments right

Most errors come from the add-backs. Keep a schedule of every expense you treat as disallowable, and keep supporting documents for those you claim. If you are claiming a loss, keep the computation for each year, because KRA can ask for it when you use the loss later. An accountant who prepares the computation should also reconcile the figures to the audited accounts.

About the figures

This is an estimate for information only. A registered tax agent or accountant should prepare the actual computation and return.

Common computation errors

Frequent mistakes include adding back depreciation but forgetting to claim capital allowances, treating a director's private expenses as business costs, deducting provisions that are not yet allowable, and carrying a loss forward without keeping the computation for the year it arose. Another is ignoring withholding tax certificates, which are credits against the final bill. Reconcile the tax computation to the accounts line by line, and keep a schedule of every adjustment, so that anyone reviewing the return can follow your logic.

Guides, tools and templates for this topic

Read next: Fixed assets and capital allowances explained for small businesses, VAT for small businesses in Kenya: when to register and what to charge, Turnover tax for small businesses in Kenya: rate, limits and when to use it

Related calculators: Instalment Tax Calculator, Capital Allowances and Wear and Tear Calculator, Investment Deduction Calculator

Excel templates: Monthly profit and loss statement

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