Background
On 13th February 2025 the Kenya Revenue Authority (KRA) issued out a public notice regarding the implementation of the Charitable Organisations & Donations & Exemption Rules, 2024. The notice was issued to remind taxpayers of the enactment of the rules gazetted in 2024 and the need for compliance.
The new regulations came into force on 18th June 2024 introducing a raft of changes to the exemption process. The regulations however provided for the below transitional provisions reiterated in the public notice:
- That all applications for income tax exemptions made after 18th June 2024 ought to comply with the requirements stipulated in the new regulations.
- That all organisations that previously had exemptions need to comply with the new requirements as prescribed by the new regulations by 18th June 2025.
What this means for you:
All organisations consequently have to renew their exemptions before the date of 18th June 2025 and comply with the new requirements found in the new regulations.
The regulations introduced the following key changes;
- Tests to determine whether an organisations activities are for a charitable purpose and therefore eligible for an exemption.
- Stipulated the documents required for making an exemption application.
- Spelling out the dispute resolution process in instances where the Commissioner withdraws the exemption or refuses to issue an exemption.
- Increasing the scope of allowable donations to include donations in kind.
- Proof of donation as prescribed in the regulations.
For an indepth analysis of the new regulations issued last year please see our alert through the link in the related insights below:
