The Finance Act, 2026 introduced a new reporting requirement under Section 6C of the Tax Procedures Act (TPA), requiring Virtual Asset Service Providers (VASPs) to submit information returns to the Commissioner.
Who Are VASPs?
Virtual Asset Service Providers are businesses or platforms that facilitate activities involving virtual assets, including cryptocurrency exchanges and trading platforms.
What Information Must Be Reported?
VASPs are required to submit annual information returns relating to users who engage in reportable virtual asset transactions.
This means businesses operating virtual asset platforms must maintain accurate records and establish systems that enable them to identify, capture, and report the required information.
Are Nil Returns Required?
Yes. The reporting obligation includes the filing of nil returns where there are no reportable transactions for the relevant period.
Data Protection & User Privacy
The Finance Act, 2026 retained the reporting requirement but introduced an important safeguard on data protection.
Information included in the annual returns must be:
- Necessary
- Relevant
- Proportionate
The information must also be handled in accordance with the Data Protection Act.
VASPs must balance tax reporting obligations with the responsibility to protect users’ personal information.
What Happens If a VASP Does Not Comply?
The law retains offences and penalties relating to:
- Failure to file information returns
- Providing false statements
- Omitting required information
- Non-compliance with reporting obligations
Penalties may include fines and, in certain circumstances, imprisonment.
What This Means for Virtual Asset Businesses
Businesses operating in Kenya’s virtual asset and cryptocurrency sector should review their:
- Record-keeping systems
- Customer information collection procedures
- Reporting processes
- Data protection controls
- Compliance and governance frameworks
The changes bring virtual asset activities further into Kenya’s mainstream tax reporting framework and increase compliance expectations for VASPs.
The Bottom Line
Virtual asset businesses should prepare early, maintain accurate records, file the required information returns, and ensure that customer data is collected and processed lawfully.
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