Knowledge Base
These are not daily posts. Each guide is a deep, definitive answer to one of the five questions Kenyan business owners type into Google every day. Written by KRA-registered VAT agents. Updated for 2026.
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Quick answer
To register for VAT in Kenya, your business must have annual taxable turnover of over KES 5 million. You apply directly on the KRA iTax portal using your KRA PIN, national ID, and bank details. The process takes 1 to 3 working days.
All 28 resources
Filing your VAT return after the 20th of the month attracts an automatic penalty of KES 10,000 or 5% of the tax due (whichever is higher), plus 1% interest per month. Here is exactly how to calculate your exposure — and what to do if you have already missed a deadline.
The Kenya VAT rate is 16%. To add VAT: multiply your net price by 1.16. To extract VAT from a VAT-inclusive price: divide by 1.16. Zero-rated and exempt goods do not attract VAT. This guide explains every scenario with real KES examples.
Your VAT return is due on the 20th of the month following your tax period. You file on the KRA iTax portal at itax.kra.go.ke. This guide walks you through every step — including what to do when the portal crashes on the 19th.
You must register if your annual taxable turnover exceeds KES 5 million. But even below that, voluntary registration lets you claim back input VAT on your business costs. This guide helps you decide — and explains what VAT registration actually means for your prices and customers.
Your KRA iTax portal not loading, throwing errors, or refusing to log in? Here are the 10 most common iTax errors in Kenya — login failures, timeouts, browser issues, and how to fix each one. Includes what to do when the portal crashes on deadline day.
eTIMS (Electronic Tax Invoice Management System) is KRA's mandatory electronic invoicing system for all businesses in Kenya. Learn how to choose the right solution type, register step-by-step, and avoid the KES 50,000/month non-compliance penalty.
Turnover Tax (1-3% on gross sales) vs VAT (16% on value-add): which tax regime fits your Kenyan business? Compare rates, thresholds, compliance burden, and input VAT implications. Includes a decision framework for SMEs.
Complete KRA VAT penalties reference: late filing (KES 10,000 or 5%), non-registration (up to KES 100,000), eTIMS non-compliance (KES 50,000/month), late payment (5% + 1%/month). Includes a step-by-step penalty waiver guide and worked examples.
Don't start your KRA VAT application without this checklist. From KRA PIN and national ID to bank details, business registration, CR12, and eTIMS setup — know exactly which documents you need before you open the iTax portal.
A nil return means you had zero sales and zero purchases in a month — but you still have to file by the 20th or pay KES 10,000. This guide explains how to file a nil VAT return in 5 minutes, what the KRA tax amnesty programme covers, and how to get penalty waivers.
Your Kenyan tech startup must register for VAT once annual turnover exceeds KES 5 million (proposed rise to KES 8M not yet effective). SaaS, software, and digital services sold to Kenyan customers are subject to 16% VAT. Exports are zero-rated. You can claim input VAT on laptops, cloud hosting, and software tools with valid eTIMS invoices.
The KRA VAT Special Table blocks input VAT claims from flagged suppliers. Filing consecutive nil returns for 6+ months can land you on it. Removal requires 3-6 months of clean compliance. Learn how to check your status, protect your business, and get removed.
An eTIMS-compliant invoice must include 10 mandatory fields: seller PIN, buyer PIN (B2B above KES 10K), QR code, server confirmation code, and more. Invoices outside eTIMS cannot be used for input VAT claims. Scan the QR code with KRA's free app to verify authenticity.
KRA's auto-populated VAT return pre-fills your sales and purchases using eTIMS and withholding data. But the data is often incomplete or incorrect. Learn how to review, correct, and file confidently — and what to do when the auto-populated amounts don't match your books.
You can deduct input VAT on purchases that are directly attributable to taxable supplies — but only with a valid eTIMS invoice. This guide covers the 5 conditions for deduction, the apportionment formula for mixed supplies, import VAT, and what happens when input VAT exceeds output VAT.
Withholding VAT requires appointed agents to deduct 2% (or 6% for petroleum) at source and remit to KRA within 5 days. Suppliers get a withholding certificate to claim the amount as paid. This guide explains who is an appointed agent, how to account for WHT VAT, and how suppliers claim refunds.
Digital services supplied to Kenyan customers are subject to 16% VAT. Non-resident providers must register via the simplified regime or appoint a tax representative. Locals supplying e-books, SaaS, streaming, and online courses must charge VAT. Exports of digital services are zero-rated.
You can claim a VAT refund when your input VAT exceeds output VAT — for example, if you are a zero-rated exporter or have made large capital purchases. The refund window is 12 months from the date the tax became due. This guide covers the application process, timelines, documentation, and common rejection reasons.
Two Finance Acts have reshaped Kenya's VAT landscape — the KES 8M threshold (pending), reduced refund window to 12 months, fintech services now taxed at 16%, bad debt relief reverted to 3 years, and the 90:10 apportionment rule deleted. This guide summarises every change you need to know.
Finance Act 2026 made payment processing, gateway, merchant acquiring, and aggregation services taxable at 16% VAT from 1 July 2026. Guide covering M-Pesa merchant fees, Pesapal, iPay, Flutterwave, Cellulant, Kenswitch, and all digital payment VAT changes. Includes input VAT recovery rules.
Finance Act 2026 introduced Section 13(5A) — outsourced employee salaries, NSSF, SHIF, and other statutory deductions are now disbursements excluded from VAT. Only the service fee is taxable at 16%. Guide for security companies, cleaning firms, EOR providers, recruitment agencies, and HR outsourcing.
The KRA VAT return is due by the 20th of every month. Late filing costs KES 10,000 or 5% of tax due (whichever is higher) plus 1%/month interest. Includes what to file, how to file on iTax, and what to do if you missed the deadline.
KRA charges KES 50,000/month for eTIMS non-compliance, separate from VAT penalties. This covers what triggers the fine, how to check your status, and how to stay compliant.
Commercial rental income is subject to VAT if turnover exceeds the KES 5 million threshold. Residential rent is exempt. Learn the distinction, apportionment for mixed-use properties, and eTIMS for landlords.
Restaurants charge 16% VAT on most food and beverage sales. Basic foodstuffs may be zero-rated. Includes eTIMS for hospitality, hotel accommodation VAT, and input VAT claims on supplies.
Import VAT at 16% is charged on CIF value plus duty. Pay via SIMA or M-PESA Paybill 572572. Claim input VAT on imports with proper customs entry documents and eTIMS-compliant records.
What triggers a KRA VAT audit, the step-by-step process, documents KRA will request, how to object to an assessment, and how to prepare your business for an audit.
Apply for a KRA PIN online via iTax, at Huduma Centre, or through the M-Service mobile app. Documents needed, processing time, business PIN requirements, and how to check your status.
When to deregister, the iTax process via Form VAT 4, final return and stock adjustments, eTIMS cancellation, involuntary deregistration by KRA, and re-registration if needed.