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When Should You File Your Annual Accounts in Kenya?

January 29, 2025

Introduction

Filing annual accounts is a critical legal obligation for all businesses in Kenya. Compliance with the Kenya Revenue Authority (KRA) and the Registrar of Companies ensures financial transparency, avoids penalties, and maintains good corporate standing. Companies must adhere to strict deadlines when submitting financial statements and tax returns, using the prescribed online platforms such as KRA’s iTax system and the eCitizen portal.

This article provides a structured guide on when to file annual accounts in Kenya, the requirements, potential penalties for late filing, and the importance of timely submissions.

What Are Annual Accounts?

Annual accounts are financial statements that provide a clear overview of a company’s financial health. These include:

  • Balance Sheet – A summary of the company’s assets, liabilities, and shareholders’ equity at the financial year-end.
  • Profit and Loss Statement – A record of the company’s income, expenses, and profits or losses over the financial year.
  • Cash Flow Statement – A report showing the cash generated and used during the period.
  • Notes to the Accounts – Supplementary explanations and disclosures to enhance understanding of the financial statements.

These financial reports are not only required for tax purposes but also help business owners, investors, and regulators assess the company's financial health.

Annual Accounts Filing Deadlines in Kenya

Kenyan companies are required to file their financial statements with two key entities:

1. Filing Annual Returns with the Registrar of Companies

Deadline: Within 42 days after the Annual General Meeting (AGM).
Requirement: Companies must hold their AGM within six months after the end of their financial year. This means that annual returns should be filed no later than eight months after the financial year-end.

Example:

If a company’s financial year ends on December 31st, the AGM must be held by June 30th, and annual returns must be filed by August 11th.
Filing Platform: eCitizen Portal (ecitizen.go.ke).

2. Filing Corporation Tax Returns with KRA

Deadline: On or before the last day of the sixth month following the end of the financial year.
Requirement: Companies must file tax returns based on their declared financial results.

Example:

If a company’s financial year ends on December 31st, the corporation tax return must be filed by June 30th of the following year.
Filing Platform: KRA’s iTax System (kra.go.ke).

Penalties for Late Filing

Failure to file annual accounts and tax returns on time results in legal and financial consequences.

1. Penalties by the Registrar of Companies

Late Submission of Annual Returns:

  • Financial penalties apply.
  • In extreme cases, the company may be struck off the register, leading to business closure.

2. Penalties by KRA for Late Tax Return Filing

Corporation Tax Late Filing Penalties:

  • A fine of 5% of the tax due or Kshs. 20,000 (whichever is higher).
  • Interest charges apply on unpaid taxes until the full amount is settled.

Example of Late Payment Penalty:
If a company owes Kshs. 1,000,000 in taxes and files late, the minimum penalty would be Kshs. 50,000 (5% of tax due) plus additional interest.

Why Timely Filing Matters

  • Legal Compliance – Avoids penalties and potential deregistration.
  • Good Corporate Reputation – Helps build trust with regulators, investors, and stakeholders.
  • Smooth Business Operations – Prevents disruptions caused by legal complications.
  • Easier Loan and Investment Approvals – Investors and banks rely on up-to-date financial records.
  • Avoids Last-Minute Rush – Filing early reduces stress and ensures accuracy.

 

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Information provided on the site is merely guidance that may change in line with Kenya law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo & Spondoo.ke is a trading name of Accounting SQL Limited, authorised & license accounting firm in the United Kingdom. This trading name is licensed to Spondoo Advisers Limited, an authorised & licensed accounting firm in the Republic of Kenya.
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