Kenya VAT — 16% standard, zero-rated and exempt
Which rate applies to what, how registration works and what a VAT invoice should show.
Kenya charges VAT under the Value Added Tax Act 2013. The standard rate is 16%. Some supplies are zero-rated (taxable at 0%) and some are exempt, as listed in the Act. KRA's VAT page states that registration is required at KES 5 million of taxable supplies in a year, with voluntary registration below that. Returns and payment are due on or before the 20th of the following month through iTax. Check kra.go.ke for the latest thresholds.
- Standard rate: 16% for most taxable supplies.
- Zero-rated: taxable at 0%, for example exports, as listed in the VAT Act.
- Exempt: outside VAT, as listed in the VAT Act.
- Return and payment: by the 20th of the following month on iTax.
How it works
Decide the VAT treatment of each item: standard 16%, zero-rated or exempt. Use the VAT Act schedules or ask KRA.
Register for VAT on iTax when your taxable supplies reach the threshold KRA publishes, or earlier by choice.
Show the VAT rate and amount on each invoice line. Mixed invoices with different rates are normal.
Keep purchase invoices. Input VAT can be claimed only when the law and KRA rules allow it, including the eTIMS invoice requirement.
File the VAT return and pay on iTax on or before the 20th of the following month, including when there is nothing to declare.
Legal framework
- Value Added Tax Act 2013.
- Tax Procedures Act 2015 (penalties and interest).
- Finance Act 2023.
- KRA VAT guidance (kra.go.ke).
Frequently asked questions
What is the difference between zero-rated and exempt in Kenya?
A zero-rated supply is taxable at 0%: the supplier charges no VAT but can generally recover related input VAT. An exempt supply is outside VAT and the supplier generally cannot recover input VAT on related costs.
What is the VAT registration threshold?
KRA's VAT page states KES 5 million of taxable supplies in a year, with voluntary registration allowed below it. Proposals to change the threshold have been discussed, so check kra.go.ke for the figure in force today.
Can a non-resident supplier be liable for Kenyan VAT?
Yes. Non-residents supplying taxable digital services to customers in Kenya can have to register and account for VAT, and imported services can be subject to the reverse charge. Ask KRA or a tax adviser about your case.
When is the VAT return due?
On or before the 20th day of the following month, filed on iTax. Late filing carries penalties and interest under the Tax Procedures Act, so read the current KRA guidance.
Does 4invoices calculate or file my Kenyan VAT?
No. 4invoices does not pick the correct rate for you, does not file VAT returns and does not connect to KRA. You set the VAT rate on each invoice line yourself, can invoice in any currency with an exchange rate and can download a PDF. There is a 6-month free trial without a card.