^KENYA

Value Added Tax Act 2013

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Chapter 2

Scope of VAT?

VAT is a general consumption tax assessed on the value of goods and services

• Applies to all commercial activities involving production/distribution of goods/services.


• Ultimately borne by the final consumer.


• Is charged as a % of price – 0% and 16%.

Vatable Transactions

A transaction is within the scope of Kenyan VAT where it:

• Is a supply or importation of goods or services.


• Takes place in the Kenya..


• Is a taxable supply.


• Made by a taxable person.


• Is made in the course or furtherance of any business carried on by that person.

Taxable supply means a supply, other than an

• exempt supply, made in Kenya by a person in the course or furtherance of a business carried on by the person,


• a supply made in connection with the commencement or termination of a business.

Business means

• trade, commerce or manufacture, profession, vocation or occupation.


• any other activity in the nature of trade, commerce or manufacture, profession, vocation or occupation.


• any activity carried on by a person continuously or regularly, whether or not for gain or profit and which involves, in part or in whole, the supply of goods or services for consideration; or


• a supply of property by way of lease, license, or similar arrangement,

but does not include

1. employment;


2. a hobby or leisure activity of an individual; or


3. an activity of a person, other than an individual, that if carried on by an individual would come within subparagraph (ii)

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