Value Added Tax (VAT) is an indirect tax levied on the supply of taxable goods and services in Kenya. The standard rate is 16% on most taxable supplies, with a 0% rate on zero-rated supplies listed in the Second Schedule of the VAT Act, 2013. Registration is administered by the Kenya Revenue Authority (KRA) through the iTax portal.
Fees and Charges
| Item | Fee (KES) |
|---|---|
| VAT registration | Free |
| Annual renewal | Not applicable — registration is ongoing |
| Late registration penalty | 5% of tax due or KES 10,000 (whichever is higher) |
| Late return filing penalty | 5% of tax due or KES 10,000 (whichever is higher) |
| Late payment interest | 1% per month on unpaid tax |
Registration Thresholds
| Category | Threshold |
|---|---|
| Mandatory registration | Taxable supplies of KES 5 million or more per year |
| Voluntary registration | Available for persons below the KES 5 million threshold |
| Non-resident digital service providers | Mandatory regardless of threshold |
Non-resident persons supplying services into Kenya via the internet, digital marketplaces, or electronic networks must register for VAT under a simplified non-resident registration system, regardless of turnover level.
Ongoing Obligations
VAT-registered persons must file monthly returns and remit tax by the 20th day of the following month through the iTax portal. They are also required to integrate with KRA’s eTIMS (Electronic Tax Invoice Management System) and issue electronic tax invoices for all taxable supplies. Persons whose taxable turnover falls below KES 5 million in a year may apply for voluntary de-registration.
Administered by the Kenya Revenue Authority (KRA) under the VAT Act, 2013, Laws of Kenya.