The Imposition of Value Added Tax

Section 5 of the Value Added Tax Act, 2013 (the VATA) imposes VAT on taxable supplies made by a registered person in Kenya and the importation of taxable goods or services.

Only registered persons can charge, collect and remit VAT. The applicable tax rates are 16% and 0% depending on the nature of goods and/or services. The time of supply of goods and services is important as VAT is chargeable at this stage. The time of supply is considered to be the earlier of the following events:

1. the date on which the goods are delivered, or services performed;
2. the date a certificate is issued by an architect, surveyor or any other person acting as a consultant in a supervisory capacity;
3. the date on which the invoice for the supply is issued; or
4. the date on which payment for the supply is received, in whole or in part.

 The term “taxable supply” is defined as “a supply other than an exempt supply made in Kenya by a person in the course or furtherance of a bu...