Kenya’s Tax Court Says Offshore Income Can Still Be Taxed

The ruling landed on March 26, 2026 and it’s bad news for anyone managing foreign work from Kenya. The Tax Appeals Tribunal sided with the Kenya Revenue Authority (KRA) in a fight with German firm H.P. Gauff Ingenieure and said offshore earnings can be treated as Kenyan-sourced income when the business is managed or controlled locally, even if the project work happens abroad.

That matters.
And honestly, it’s broader than one company.

Kenya’s tax system is source-based, but the tribunal said that when a business runs partly inside and outside Kenya, the “whole of the gains or profits” can still fall under Kenyan tax if the control point is in-country, which, surprisingly, gives KRA a pretty sharp tool for remote oversight and cross-border project work. The dispute grew out of a 2019 audit over KES 1.9 billion in contested taxes.

Who it affects

This hits digital nomads, remote freelancers, expats and Kenyan-based teams handling foreign contracts, especially if the coordination, approval or management happens from Nairobi or elsewhere in Kenya. Tourists on short stays usually won’t care, though once you’re effectively running work from Kenya, the tax picture changes fast.

Local control.
Real tax exposure.

BPO firms and global companies using Kenyan talent could also face scrutiny, because local management can create taxable presence even when clients, servers or project sites sit outside the country. Donor-funded projects aren’t automatically exempt either, they need formal exemption certificates and Gazette notices or the relief can fall apart.

What to do

If you’ve got a KRA PIN, file annual returns through iTax and declare taxable foreign income where required. The standard filing deadline is June 30 and residents can generally claim foreign tax credits under Section 16(2)(c) or relevant double tax treaties, though relief is capped and the paperwork matters.

• Check where your work is managed.
• Keep proof of foreign taxes paid.
• Get formal exemption letters if needed.

If you earn while based in Kenya, this ruling means KRA has more room to argue that the income belongs in Kenya and that’s the part remote workers shouldn’t ignore. Read our full Kenya guide for the complete picture and keep an eye on visa updates for related policy shifts.