The Kenya Revenue Authority has published a notice on 13 February 2025 regarding the implementation of the Income Tax (Charitable Organisations and Donations Exemption) Rules, 2024.
These rules, which came into force on 18 June 2024, outlines the requirements for Income Tax exemption under Paragraph 10 of the First Schedule to the Income Tax Act as well as the conditions for deductibility of expenditure on donations under Section 15(2)(w) of the Income Tax Act.
With regard to the application of the Rules to Income Tax exemptions under Paragraph 10 of the First Schedule to the Income Tax Act:
- Applications for Income Tax exemption received after the effective date of the Rules should comply with the requirements prescribed in the Rules.
- Organisations that had been granted exemptions prior to the coming into force of the Rules should comply with the requirements prescribed in the Rules by 18 June 2025 in line with the transition period of one year provided for in Rule 27. Failure to demonstrate compliance with the Rules by the prescribed date may result in revocation of the exemption in line with Rule 20.
Going forward, any previous publications and communication on Income Tax exemption under Paragraph 10 of the First Schedule to the Income Tax Act and on deductibility of expenditure relating to donations that are inconsistent with the Rules are invalid to the extent of the inconsistency.
