Value Added Tax (VAT) applies to the supply of taxable goods and services in Kenya at the standard rate of 16%. Understanding when registration is required and how to remain compliant is essential for any growing business.
When Is Registration Mandatory?
VAT registration is compulsory once your annual taxable turnover reaches KES 5 million. You can also register voluntarily, which may be advantageous if your customers are VAT-registered and can claim input tax.
How to Register
Registration is done through the iTax portal. You submit your application, supporting documents and details of your business activities. KRA reviews the application and issues a VAT certificate once approved.
Filing VAT Returns
VAT returns are filed monthly by the 20th of the following month. You declare output VAT on sales and claim input VAT on purchases, remitting the net amount to KRA. Late filing attracts a penalty plus interest.
Record Keeping
Maintain tax invoices, purchase records and a VAT schedule that reconciles to your returns. Good records are essential for KRA verification and for claiming input tax without dispute.
If you are approaching the registration threshold or need help with monthly VAT returns, our tax advisory team handles registration, filing and reconciliation efficiently. Reach out for support.