This guide provides an overview of VAT in Kenya, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Kenya.
In 2021, Kenya introduced Digital Services Tax, capturing revenue from streaming and e-commerce giants.
You must register for VAT if your taxable supplies (goods or services) are KES 5 million or more in a 12-month period. You can also apply for voluntary registration even if you're below that threshold. Non-resident suppliers of digital services (via internet or marketplaces) must register for VAT regardless of that KES 5m threshold.
Kenya uses an input–output system: you pay VAT on your purchases (input) and charge VAT on sales (output). our input VAT can be deducted from your output VAT to determine how much VAT is payable. You need valid tax invoices (and proper records) to support your input VAT claims.
Under the VAT (Electronic, Internet, and Digital Marketplace Supply) Regulations, 2023, non-resident suppliers making electronic or internet-based supplies to Kenyan users are subject to 16% VAT. For these non-resident providers, the usual KES 5 million registration threshold does not apply.
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