|Kenya VAT rates|
How is VAT calculated Kenya?
You can calculate VAT in Kenya by multiplying the product or service price by the appropriate VAT rate.
Is VAT back to 16%?
The rate of Value Added Tax is 16% with effect from 1st January, 2021. The first return under the new rate is due by 20th February, 2021. The rate of Minimum Tax is 1% of the gross turnover effective 1st January, 2021.
What is now 5% VAT?
General description of the measure. The government announced on 8 July 2020 that it intended to legislate to apply a temporary 5% reduced rate of VAT to certain supplies relating to hospitality, hotel and holiday accommodation and admission to certain attractions.
What items are 5% VAT?
The reduced 5% VAT rate applies in the following areas:
- Food and non-alcoholic drinks which are sold to eat on the premises of places such as restaurants, cafés and pubs, as well as hot takeaway food and non-alcoholic drinks.
- Holiday sleeping accommodation, including hotels and pitch fees for caravans and tents.
How is VAT calculated?
To work out a price including the standard rate of VAT (20%), multiply the price excluding VAT by 1.2. To work out a price including the reduced rate of VAT (5%), multiply the price excluding VAT by 1.05.
Who pays VAT in Kenya?
It is levied on the use of taxable products and services supplied or imported into Kenya. The tax is collected by registered persons at designated points in the supply chain and remitted to KRA. Only registered traders with an annual turnover of KShs. 5 million and above are required to charge VAT.
What is VAT example?
A dealer pays VAT by deducting the tax paid on purchases (input tax) from his tax collected on sales (output tax). In other words, VAT = Output Tax – Input Tax. For example: A dealer pays Rs. 10.00 @ 10% on his purchase price of goods valued Rs. … 10.00 to his seller while purchasing those goods.
How do I make a VAT return?
Submit your VAT Return online
- Getting online. If you need: …
- HMRC ‘s free online service. Sign in to your VAT online account and complete your VAT Return.
- Using accounting software. Most accounting software lets you submit your VAT Return to HMRC directly. …
- Using accountants or agents. …
- Help with online services.
What goods and services are exempt from VAT?
There are some goods and services on which VAT is not charged, including:
- insurance, finance and credit.
- education and training.
- fundraising events by charities.
- subscriptions to membership organisations.
- selling, leasing and letting of commercial land and buildings – this exemption can be waived.
What is the current VAT rate 2020?
This cut in the VAT rate from the standard rate of 20% will have effect from 15 July 2020 to 31 March 2021.
What is the VAT now?
VAT rates for goods and services
|% of VAT||What the rate applies to|
|Standard rate||20%||Most goods and services|
|Reduced rate||5%||Some goods and services, eg children’s car seats and home energy|
|Zero rate||0%||Zero-rated goods and services, eg most food and children’s clothes|
What are the new VAT rules?
From 1st March 2021, VAT-registered subcontractors will no longer charge VAT on certain construction services to another VAT-registered business. Instead, the customer will ‘self-account’ for any VAT due – this is known as the Reverse Charge.
Who pays VAT buyer or seller?
You must account for VAT on the full value of what you sell, even if you: receive goods or services instead of money (for example if you take something in part-exchange) haven’t charged any VAT to the customer – whatever price you charge is treated as including VAT.
What is VAT exempt?
VAT exemption can refer to either goods and services that are not subject to VAT or to organisations that cannot register for VAT. … A business is VAT-exempt if they only sell VAT-exempt products, or if they are not involved with taxable ‘business activities’.
What are VAT exempt items?
VAT Exemption of “Essential Goods”. Does that mean more disposable income for consumers?
- Food. Any food product, including non -alcoholic beverages; …
- Cleaning and hygiene products. Toilet Paper, sanitary pads, sanitary tampons, condoms; …
- Medical. …
- Fuel, including coal and gas.
- Basic goods, including airtime and electricity.