What Has Changed?
The Finance Act, 2026 retained Section 6D, providing a legal framework for Kenya to enter into agreements with other countries for the automatic exchange of information relating to virtual asset transactions.
This strengthens international cooperation, tax transparency, and access to cross-border information.
What Is AEOI?
Automatic Exchange of Information (AEOI) allows tax authorities in different countries to share relevant tax or financial information.
Under Section 6D, Kenya may exchange information relating to virtual asset transactions with other jurisdictions.
Information on Kenyan-linked virtual asset activities held abroad may eventually be shared with Kenya, while information collected in Kenya may be shared with foreign tax authorities.
What Information May Be Exchanged?
The framework may cover:
- Reports filed by Virtual Asset Service Providers (VASPs)
- Due diligence and record-keeping information
- Details of reportable users and controlling persons
- “Nil” returns
- Arrangements designed to circumvent compliance obligations
The objective is to improve access to information relevant to virtual asset taxation and compliance.
Data Protection Safeguards
The Finance Act, 2026 introduced safeguards requiring exchanged information to:
- Comply with the Data Protection Act
- Be limited to what is necessary and proportionate
- Be shared only with jurisdictions where adequate data protection measures have been confirmed by the Commissioner
The Commissioner must also maintain detailed records of information shared.
What Does This Mean for VASPs?
VASPs should maintain proper reporting, due diligence, and record-keeping systems.
Information collected under Kenya’s domestic virtual asset reporting framework may eventually be shared with foreign tax authorities where exchange agreements exist.
Will All Crypto Transactions Automatically Be Taxed?
Not necessarily.
Section 6D creates a framework for exchanging information on virtual asset transactions. It does not, by itself, impose a new tax on every crypto transaction or establish the operational exchange mechanism.
Key Takeaway
The Finance Act, 2026 strengthened Kenya’s framework for international cooperation on virtual asset tax transparency.
Taxpayers and VASPs should maintain proper records and understand their applicable reporting and tax obligations.
Virtual assets may be digital, but tax transparency is becoming increasingly global.
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