Withheld VAT (WVAT) in Kenya: 2% of the taxable value
What appointed agents withhold, on what base, and what a supplier should check.
Under the Kenyan withholding VAT rules, a taxpayer appointed by KRA as a withholding VAT agent withholds VAT when paying a supplier for a taxable supply. KRA states the rate as 2% of the value of the taxable supply, so the base is the value of the supply and not the VAT amount. No withholding applies to exempt or zero-rated supplies according to KRA. Deadlines and exemptions have been amended by the Finance Act 2023, so confirm them on kra.go.ke.
- Rate stated by KRA: 2% of the taxable value.
- Applied by agents appointed by KRA.
- Not applied to exempt or zero-rated supplies, per KRA.
- The agent remits to KRA and the supplier uses the certificate.
How it works
Find out if your customer is a withholding VAT agent. KRA appoints them.
Issue your invoice as normal with 16% VAT on standard-rated supplies.
The agent pays you the invoice total less the withheld VAT and remits the withheld amount to KRA.
Request the withholding certificate from the agent.
Use the credit when you file your VAT return, following KRA guidance.
Legal framework
- Value Added Tax Act 2013.
- Tax Procedures Act 2015 (withholding VAT agents).
- Finance Act 2023 (changes to exemptions and remittance).
- KRA VAT guidance (kra.go.ke).
Frequently asked questions
Is WVAT 2% of the VAT or 2% of the invoice value?
KRA states 2% of the value of the taxable supply. That is the amount before VAT, not 2% of the VAT figure. Confirm on the KRA page for your case.
Does WVAT apply to exports or exempt supplies?
KRA states that no withholding is made on exempt or zero-rated supplies.
Does the supplier still charge 16% VAT?
Yes, the invoice still shows VAT on a standard-rated supply. The withholding is a deduction from the payment that the agent sends to KRA.
When does the agent pay KRA?
The timing was tightened by the Finance Act 2023 and KRA pages show different wording. Check the current deadline on kra.go.ke.
Does 4invoices handle WVAT?
No. 4invoices does not compute or report withheld VAT and does not connect to KRA. You can create invoices with a VAT rate per line, in any currency with an exchange rate, and download a PDF. Free for 6 months, no card.