Value Added Tax (VAT) is a consumption tax levied on taxable supplies made in Kenya. Getting it right is critical — errors attract penalties, and non-registration is a criminal offence once you're required to be registered.
When Must You Register for VAT?
You are required to register for VAT when your annual taxable turnover exceeds or is likely to exceed KSh 5,000,000. You can also voluntarily register below this threshold if it benefits your business (e.g., to claim input VAT on large purchases).
Current VAT Rates
- Standard Rate: 16% — applies to most goods and services
- Zero Rate: 0% — applies to exports, certain food items, and medical supplies
- Exempt: No VAT charged and no input VAT claimable — includes financial services, residential rental, and educational fees
Filing and Payment Deadlines
VAT returns must be filed on iTax by the 20th of the month following the taxable period. Payment is due on the same date. Late payment attracts a 5% penalty plus 2% interest per month.
Input VAT Claims
You can reclaim VAT paid on business purchases (input tax) against VAT charged on sales (output tax). Only VAT on expenses that are wholly and exclusively for business purposes is claimable. Mixed-use expenses require apportionment.
Our tax team manages your VAT compliance end-to-end — from registration through monthly filings and refund claims.
