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Kenya withholding VAT update

  • VAT
  • 21 November 2014 | Richard Asquith

Kenya withholding VAT update

Kenya has updated the guidelines on its withholding VAT regime.

Withholding VAT was introduced in 2003 as an anti-fraud measure. It involves the nominated customers acting as VAT collectors for transactions. Typically, the customers are governmental bodies, banks, insurance companies and exporters buying goods or services from commercial enterprises.

New VAT guidance

  • The clarification of the rules for withholding tax were issues last week, and include the following points:
  • Nominated institutions are required to withhold 6% of the 16% VAT (Kenya standard VAT rate), and declare and remit to the VAT authorities
  • The institution should issue the vendor with a receipt showing the amounts calculated and withheld
  • Institution must file and pay any withholding tax amounts twice a month
  • This does not apply to exempt or nil rated supplies.
  • The vendor should issue their standard VAT invoice with an indication that there has been a withholding tax

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.