Kenya obliges providers and marketplaces facilitating the sale of electronic or digital services to charge and collect Value Added Tax on their sales to local consumers. Sellers have faced this requirement since 2 September 2013. The (Digital Marketplace Supply) Regulations 2020 confirmed the liabilities on electronic platforms and marketplaces with effect from March 2021.
Note: Kenyan Digital Services Tax is also payable at 1.5% since the start of 2021.
What digital services are liable to Kenya VAT?
The VAT Act lists income the following e-services are being considered subject to VAT:
- Software and the updating of software
- Gaming including games of chance
- Images, text and information
- Access to databases
- Self-education packages
- Streaming or download music and films
- Websites, web hosting or remote maintenance of programs and equipment
- Political, cultural, artistic, sporting, scientific and other broadcasts and events, including broadcast television
Determining if Kenyan VAT is due
Under the destination principle, VAT is due if the customer is resident or consumes the service in Kenya. The providers or marketplaces may reply on the following examples of evidence to support this determination:
- Address of the customer
- IP address
- Banking details or credit card issuer address
- SIM card country code
Kenya provides a simplified digital service registrations and filings process. There is no VAT registration threshold for non-residents. There is no requirement to appoint a Fiscal Representative as there is for the regular VAT registration. However, this includes no right to deduct any Kenyan VAT incurred. For B2C transactions, the Regulations require the supplier to issue an invoice or receipt showing the value of the supply and tax deducted.
VAT returns should be filed monthly, and any taxes due should be submitted by the 20th of the month following the reporting period.
B2B digital services
Where a non-resident is providing electronic or digital services supplies to Kenyan VAT-registered businesses, they do not need to charge VAT. Instead, they can reply on the reverse charge and the customer should report the VAT. If a foreign provider or marketplace only has business customers in Kenya, there is no need to VAT register.
You can follow VAT Calc’s global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
Africa & Middle East VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Cameroon||19.5%||Jan 2020||XAF 50 million|
|Egypt||14%||Sep 2016||EGP 500,000|
|Ghana||12.5%||Apr 2022||GHS 200,000|
|Israel||17%||2022||–||Proposal in 2021/22 budget|
|Oman||5%||Apr 2021||OMR 35,000|
|Saudi Arabia||15%||Jan 2018||Nil|
|South Africa||15%||Jun 2014||ZAR 1 million|
|Tanzania||18%||Jul 2015||TZS 40 million||Only resident|
|Tunisia||19%||Jan 2020||Nil||Withholding VAT; 3% Royalty Tax|
|United Arab Emirates||5%||Jan 2018||AED 375,000|