The Kenya Revenue Authority (KRA) has tightened scrutiny on financial transactions of multinational companies, with a key focus on inter-company loans and royalty payments, pointing out that the mechanisms are increasingly being abused to shift profits and reduce taxable income in Kenya.
The taxman said that the financial flows, which are traditionally embedded within complex intra-group arrangements, have emerged as some of the most sensitive areas in transfer pricing reviews, raising concerns about whether multinationals are accurately reporting taxable income in line with their real economic activity.
