Navigating VAT in Kenya

Q: How does input VAT work, and when can I reclaim it?

Kenya uses an input–output system : you pay VAT on your purchases (input) and charge VAT on sales (output). our input VAT can be deducted from your output VAT to determine how much VAT is payable. You need valid tax invoices (and proper records) to support your input VAT claims.

Q: How are digital services from non-resident suppliers treated for VAT?

Under the VAT (Electronic, Internet, and Digital Marketplace Supply) Regulations, 2023 , non-resident suppliers making electronic or internet-based supplies to Kenyan users are subject to 16% VAT . For these non-resident providers, the usual KES 5 million registration threshold does not apply .

This guide provides an overview of VAT in Kenya, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within Kenya.

Last Updated: November 2025

2021

In 2021, Kenya introduced Digital Services Tax, capturing revenue from streaming and e-commerce giants.

Kenya at a glance.

Standard rate

16% VAT

Digital services VAT

Yes, at 16%

Mandate e-invoicing

Yes

Currency

Kenyan Shilling (KES)

Zero-rated items

Exported services (as of July 2023) have been zero-rated, supplies to diplomats, olar and lithium-ion batteries

VAT format

11 alphanumeric characters

Fiscal representation

Yes, non-resident persons with no fixed place of business in Kenya must appoint a tax representative to fulfill VAT obligations

e-invoicing in Kenya.

e-invoicing
in Kenya.

Summary of the mandate in this country

B2G mandate in place

Yes

B2B mandate in place

Yes

B2C mandate in place

Yes

Obligation status: B2B e-Invoicing

Historic

B2B e-Invoicing model

Direct/Unregulated Clearance Model

Name of exchange infrastructure

eTIMS

Format(s) used

Local XML

FAQs

When do I have to register for VAT in Kenya?

You must register for VAT if your taxable supplies (goods or services) are KES 5 million or more in a 12-month period. You can also apply for voluntary registration even if you're below that threshold. Non-resident suppliers of digital services (via internet or marketplaces) must register for VAT regardless of that KES 5m threshold.

How does input VAT work, and when can I reclaim it?

Kenya uses an input–output system: you pay VAT on your purchases (input) and charge VAT on sales (output). our input VAT can be deducted from your output VAT to determine how much VAT is payable. You need valid tax invoices (and proper records) to support your input VAT claims.

How are digital services from non-resident suppliers treated for VAT?

Under the VAT (Electronic, Internet, and Digital Marketplace Supply) Regulations, 2023, non-resident suppliers making electronic or internet-based supplies to Kenyan users are subject to 16% VAT. For these non-resident providers, the usual KES 5 million registration threshold does not apply.

Nearby countries.

Explore indirect tax information in these countries:

Nigeria

Ghana

Saudi Arabia

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Navigating VAT in Kenya

Navigating VAT in Kenya

2021

Standard rate

16% VAT

Digital services VAT

Yes, at 16%

Mandate e-invoicing

Yes

Currency

Kenyan Shilling (KES)

Zero-rated items

Exported services (as of July 2023) have been zero-rated, supplies to diplomats, olar and lithium-ion batteries

VAT format

11 alphanumeric characters

Fiscal representation

Yes, non-resident persons with no fixed place of business in Kenya must appoint a tax representative to fulfill VAT obligations

B2G mandate in place

Yes

B2B mandate in place

Yes

B2C mandate in place

Yes

Obligation status: B2B e-Invoicing

Historic

B2B e-Invoicing model

Direct/Unregulated Clearance Model

Name of exchange infrastructure

eTIMS

Format(s) used

Local XML

FAQs

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