Kenyan VAT rates and VAT compliance
Kenya Covid-19 VAT rate cuts
Kenya has temporarily cut VAT to help support businesses and consumers during the Coronavirus pandemic crisis.
|Supply||Old rate||New rate||Implementation date||End date|
|Standard rate||16%||14%||01 Apr 2020||-|
|Rate||Type||Which goods or services|
|16%||Standard||All other supplies of goods, services and imports|
|0%||Zero||Exports of goods and services; international passenger transport; certain petroleum supplies|
|0%||Exempt||Certain agricultural supplies; financial services; medical supplies; tour operator services; entrance to national parks; domestic passenger transport; medical; education and training; residential property; betting and gaming; domestic water|
|3%||Turnover Tax||Turnover Tax on any business below the VAT registration threshold|
Kenyan VAT compliance
The date on which VAT is due is known as the tax point or time of supply. In Kenya, this is the earliest of the following:
- When the goods or services are supplied
- Invoice issuance date
- Cash payments
- Customs clearance for imports
Split VAT payments
For business-to-government (B2G) transactions, the government body must withhold 6% of the VAT due to the commercial vendor. A number of larger financial institutions are also required to withhold VAT settlements. This is paid directly to the tax office
VAT registered businesses must issue VAT invoices with the following details:
- Name and address of suppliers
- Customer details
- Unique VAT number
- Description of goods or services provided
- Net, VAT and Gross price
Foreign currency VAT invoices are permitted. The exchange rate used may be from any major publicly quoted exchange rate. Simplified invoices may also be issued for small value transactions for B2B and B2C transactions.
VAT returns are due on a monthly basis. The return and related VAT due must be filed by the 20th of the following month. Returns are filed electronically. Where the VAT suffered exceeds the sales VAT, then the credit may be rolled over or a reclaim made.
VAT Recovery by non-residents
Foreign companies may not reclaim Kenyan VAT incurred unless they are VAT registered.