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Kenya VAT on non-resident digital services – update

April 2024 – VAT (Electronic, Internet, and Digital Marketplace Supply) Regulations, 2023, for new simplified VAT registration; registration threshold removed

The Revenue Authority updated the 2020 law on compliance VAT rules for providers and marketplaces of digital services. The regulations cover:

  • Digital or electronic services new definitions as in scope for VAT
  • VAT determination – time and place of supply rules, corrective returns etc
  • Registration procedures for new simplified path but with no right to deduct VAT
  • VAT invoice obligations and exemptions
  • Removal of standard KES 5 million (approx. €34,000) annual threshold for non-residents suppliers of digital services from 1 July 2023

August 2022 – B2B reverse charge option withdrawn for foreign providers of digital services

The VAT Digital Marketplace Supply Regulations, which governs the rules for non-resident providers and marketplaces to charge Kenyan VAT,  have been updated with a number of changes, including:

  • Withdrawal of the reverse charge for B2B transactions. This will mean foreign digital services providers may have to VAT register as there is no VAT registration threshold. The Kenyan business customers will though be able to deduct the VAT input.
  • Exempt digital education services from VAT
  • Exempt non-residents from having to produce electronic invoices

VAT on electronic services in Kenya

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.

Calculate or verify Kenyan calculations on individual or batch transactions with our Advisor and Auditor  services. These also cover any B2C or B2B transaction around the world.

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
  • Services that link the supplier to the recipient, including transportation-hailing platforms
  • Gaming including games of chance
  • Search engine services
  • Sales, licensing or any other form of monetizing data generated from users’ activities
  • Subscriptions for online journals and magazines
  • Images, text and information
  • Access to databases
  • Online education programs, including distance teaching programs through prerecorded media, e-learning, education webcasts, webinars, online courses and training, but excluding education services exempted under the First Schedule to the Act
  • 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

VAT compliance

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

Since July 2022, the reverse charge option on B2B supplies by digital non-resident providers has been withdrawn. From July 2023 there is no VAT registration threshold for non-residents, they will have to VAT register and charge their local business client VAT.

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
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Benin 18% Oct 2023 TBC
Botswana 14% 2024 - Pending implementation
Cameroon 19.5% Jan 2020 XAF 50 million
Cape Verde 15% Jan 2022 Nil
Congo, Democratic Republic 16% Jan 2024 -
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Israel 17% TBC Proposals withdrawn
Ivory Coast 18% 2022 -
Jordan 16% JOD 30,000
Kenya 16% Sep 2013 - Registration threshold removed 2023
Kuwait 5% Jan 2024? - TBC
Mauritius 15% 2020
Morocco 20% 2024
Mozambique 16% 2017 Nil
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
Senegal 18% Apr 2024 Nil Fiscal representative required
Sierra Leone 15% Jan 2021 SLE 100,000 No non-resident rules
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2022 Nil Residents since Jul 2015
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 UGX 150m
United Arab Emirates 5% Jan 2018 AED 375,000
Zimbabwe 14.5% Jan 2020 Nil
Zambia 16% Jan 2024 Fiscal Representative req'd


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