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How to Register for a VAT Tax in Kenya

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How to Register for a VAT Tax in Kenya by Kenyans247(1): Sat 14, March, 2020 04:11pm
Procedure

Value Added Tax (VAT tax) is charged on supply of taxable goods or services made or provided in Kenya and on importation of taxable goods or services into Kenya.

Apply On-line
Visit the KRA online tax portal KRA online tax portal and click on New registration
You will be directed to next page where you will have to select which type of tax you want to register. Here you should make the following selections
i. Under taxpayer type, select Non-Individual
ii. Under mode of registration, select Online form
After making the selection click OK, this will direct you to the next page

On the Next, you will have to enter details about your business. There are four sections which require to be filled in detail for registration to be complete. These four sections are
i. Basic Information
ii. Obligation
iii. Details of Director and Associates
iv. Agent Details

i. Under Basic Information tab provide the following details
Business Income Details
Business Type /Business Sub Type
Business Registration Certificate Number
Business Name
Business Registration Date
Accounting Period End Month
Does your business have any branches?
Do you wish to declare Legal Representative?
Legal Representative PIN
Principal Physical Address
Principal Postal Address
Details of company Ownership Structure
Economy in which you are involved
Details of Acquisition/Amalgamation
Fill in the information and click next to proceeded to the next tab Obligation

ii. Under the Obligation tab provide the following details
Select Value Added Tax as your tax obligation
Fill in your turnover Details (Applicable for VAT Obligation)( if any)
After giving the information, click next to proceeded to the next tab Details of Director and Associates

iii. Under the Details of Director and Associates tab provide the following details
Name of business associate, director or partner
PIN number of business associate, director or partner
Their Name
Profit/sharing ration
Gender
Date of birth
Physical and postal address
After giving the information, click next to proceeded to the next Agent Details

vi. Under the Agent Details tab provide the following details
Here you will give information about the Tax Agent authorized to submit any application on behalf of you.
i. PIN number
ii. Agent Name
iii. Telephone Number
iv. Mobile Number
v. Email Address
vi. Authorization Date Since*
vii. Date selector

Click on submit. This will take you to a page to confirm correctness of details.
After confirming the details click on submit to submit the application from. This will lead to an automatic generation of your VAT registration certificate.
You will be able to download a Pdf copy of the certificate while another copy will be sent to your email address.

Apply In-Person
Go to the Office of General Directorate of Taxes at the Kenya Revenue Authority and request for the registration of VAT tax.
Bring and present the required documents and details to the revenue officer. These documents include
i. A copy of certificate of incorporation.
ii. PSV licence.
iii. Business registration licenses
iv. Details of the Business
Income Details
Business Type /Business Sub Type
Business Registration Certificate Number
Business Name
Business Registration Date
Accounting Period End Month
Does your business have any branches?
Do you wish to declare Legal Representative?*
v. Legal Representative PIN
vi. Principal Physical Address
vii. Principal Postal Address
viii. Details of company Ownership Structure
ix. Economy in which you are involved
x. Details of Acquisition/Amalgamation

You will be given a VAT registration form to fill. The tax revenue officer will assess the application and issue you with a VAT tax registration certificate

Required Documents

Proof of identity
Proof of physical address and postal address, with contact numbers
PIN number of business proprietors
Business licenses
Tax Agent PIN number

Office Locations & Contacts

Kenya Revenue Authority- Head Office
Times Tower, 19th Floor, Haile Selassie Avenue
P.O. Box 30742 Tel. 310900, Fax 315987 Nairobi, Kenya.
Tel: 2813068, 2813160, 2812011.
Fax: 253532,240929, Nairobi Kenya.
Email: callcentre@kra.go.ke
Website: Kenya Revenue Authority

KRA online tax portal : iTax https://itax.kra.go.ke/KRA-Portal/


KRA Call Centre
Tel: +254 (020) 4999 999/ 4998 000
Cell: +254 (0711) 099 999
Email: callcentre@kra.go.ke

https://itax.kra.go.ke/KRA-Portal/

Eligibility

A person who in the course of a business –
a) has made taxable supplies or expects to make taxable supplies, the value of which is five million shillings or more in any period of twelve months; or
b) is about to commence making taxable supplies the value of which is reasonably expected to exceed five million shillings in any period of twelve months,
The person has a fixed place from which the person’s business is conducted;
There are reasonable grounds to believe that the person shall keep proper records and file regular and reliable tax returns.

The Commissioner shall issue a registered person with a tax registration certificate in the prescribed form upon satisfaction of set requirements.
Having satisfied the registration threshold, the following are some of the persons who should register for VAT.
i. Individuals trading in own names.
ii. Sole proprietors with registered businesses. However, the registration is for the individual business owner.
iii. Partnerships which include husband and wife who may or may not be VAT registered as individuals.
iv. Limited liability companies both private and public companies.
v. Any other type of organizations that do not fit in any of the above categories for example religious organizations such as Churches that may be transacting taxable business such as restaurants.

Fees

The service is free of charge.
VAT is set at 16 % goods-value. This is the general rate of tax and is applicable to most of taxable goods and taxable services.


Validity

The validity of VAT Tax certificate is forever.

De-registration for VAT
Taxpayer can de-register for VAT if:
i. Does not make taxable supplies in excess of KShs 5M within 12 months;
ii. Does not expect to make taxable supplies for the next 12 months.
Taxpayer is required to continue filing returns until de-registration is approved
Failure to file the returns crystallizes penalties


Documents to Use
Registration documents are provided at the KRA offices.

Processing Time

The processing time is one day.

Instructions

Online application
For online application, Visit the KRA online tax portal https://itax.kra.go.ke/KRA-Portal/ and click on “New registration”
Select Non-individual under taxpayer type and Online form under mode of registration.
Enter details about your business. There are four sections which require to be filled in detail for registration to be complete. These for sections are
i. Basic Information
ii. Obligation
iii. Details of Director and Associates
iv. Agent Details
Confirm correctness of details and click submit.
After submission you will be able to download a PDF copy of the certificate while another copy will be sent to your email address.

In-Person application
Go to the Office of General Directorate of Taxes at the Kenya Revenue Authority and request for the registration of VAT tax.
Present the required documents and details to the revenue officer.
You will be given a VAT registration form to fill.
The tax revenue officer will assess the application and issue you with a VAT tax registration certificate


Required Information

Name of Taxpayer
Taxpayer Identification Number
Company PIN
Business Name or Trade Name of Taxpayer
Bank Details
Name of Bank
Bank branch
Account Number
Type of business
Total Income Chargeable
Physical and postal address

Need for the Document

VAT registration will enable you to meet your tax obligations.
If you are registered for VAT you will be required to account for VAT charged on your taxable supplies through online monthly returns and pay any VAT due. It is important to note that tax is due and payable when;
i. Goods or services are supplied to the purchaser
ii. An invoice is issued in respect of the supply
iii. Payment is received for all or part of the supply
iv. A certificate is issued by an architect, surveyor or any person acting as consultant or in a supervisory capacity in respect of the service (whichever is earliest)


Information which might help

Value Added Tax (VAT tax) is charged on supply of taxable goods or services made or provided in Kenya and on importation of taxable goods or services into Kenya.
In determining whether a person exceeds the registration threshold for a period, the value of the following taxable supplies shall be excluded–
(a) a taxable supply of a capital asset of the person; and
(b) a taxable supply made solely as a consequence of the person selling the whole or a part of the person’s business or permanently ceasing to carry on the person’s business.
The registration of a person shall take effect from the date specified in the person’s tax registration certificate.
A registered person shall display in a conspicuous place –
a) the tax registration certificate at the principal place at which the person carries on business; and
b) a copy of the certificate at every other place at which the person carries on business.
A registered person who ceases to make taxable supplies shall apply in writing to the Commissioner, for the cancellation of the person’s registration, within thirty days of the date on which the person ceases to make taxable supplies.

VAT rate in Kenya
The standard Value Added Tax rate in Kenya is 16% in accordance to the VAT Act. The VAT Act Amendment of 2014, guides what ultimately ends up as Vatable amount (original amount before VAT is added), the actual VAT amount (the standard 16% of the Vatable amount) and total amount.
The latest amendment serves to protect low income citizens against the rising cost of living and replaces the earlier VAT Act (Amendment) of 2013 passed by the National Assembly. Under the new law, some goods and services were added to the list of exempt supplies (non-taxable) and some others that were previously exempt are to become taxable at 16% subject to the terms supplied in the Act.
For example, food processed specially for infants will now henceforth attract a 16% tax charge. Items included in the exempt supplies list under the First Schedule to the Act 2013, include: mosquito nets, man-made fishing nets made of textile material, unprocessed tea, specialized solar equipment, animal feeds material, raw materials (locally produced or imported) supplied to pharmaceutical manufacturers in Kenya, etc.

Other uses of the Document/Certificate

Vat tax certificate is used by individuals who want to import goods into Kenya



External Links

VAT tax : VAT tax

VAT calculator: VAT calculator


Ads by Google


Others

While the tax applies to most goods and services, some are excluded from VAT entirely - VAT exempt goods and services. Others are not entirely exempted, but a 0% charge applies to them - Zero Rated goods and services.
The list of Zero-rated items is specified in the Fifth Schedule (Parts A and B) for zero rated supplies and goods respectively, and on the Eighth Schedule (Part B) for special goods subjected to zero rating.
Exempt (non-taxable) goods and supplies are listed in the 2nd Schedule. Note that exempt goods are not identified as taxable items while zero rated goods are listed as taxable items. The same applies for services.

How is VAT collected
VAT is collected on behalf of Kenya Revenue Authority by registered companies and individuals, who then remit the monies to the Commissioner. The amount should be remitted on or before the 20th of each month for VAT accrued over the previous month (tax period). Otherwise, a penalty calculated at 2% per month becomes a liability.

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