Updated 31 October 2026
The main requirement for VAT registration in Kenya is turnover: any person who supplies, or expects to supply, taxable goods or services worth KSh5 million or more in 12 months must register for VAT with the Kenya Revenue Authority. Businesses below the threshold can apply to register voluntarily, subject to KRA’s conditions. This guide sets out the requirements, how to register on iTax and what changes once you are registered, based on KRA’s VAT guidance.
Requirements for VAT registration in Kenya
- A KRA PIN for the individual or company. Companies first need a company PIN; see how to get a KRA PIN for a company.
- Taxable supplies of KSh5 million or more a year, or a reasonable expectation of reaching that level. Businesses that only make exempt supplies (listed in the First Schedule to the VAT Act, 2013) do not need to register.
- Business details: registered business name, physical address, nature of business, bank details and expected turnover.
- Supporting documents if KRA asks for them, such as a certificate of registration or incorporation, business permit, lease agreement and recent bank statements. KRA may visit the premises before approving the obligation.
- eTIMS: every VAT-registered taxpayer must onboard on eTIMS, KRA’s electronic invoicing system, through etims.kra.go.ke.
Non-resident sellers of digital services to Kenyan customers must register for VAT regardless of turnover, through a simplified system.
How to register for VAT on iTax
- Log in to iTax with your PIN and password.
- Go to the Registration menu and choose Amend PIN Details.
- Select the “On-line Form” mode and the reason for amendment, then tick the VAT obligation.
- Fill in the VAT section: effective date, expected annual turnover and the main taxable goods or services.
- Submit and keep the acknowledgement. KRA reviews the application and may ask for documents or carry out a premises check.
- Once approved, onboard on eTIMS. Our guides on registering for eTIMS and eTIMS vs ETR explain the options.
VAT rates and how VAT is calculated
Kenya has a general rate of 16% and a zero rate (0%) for supplies in the Second Schedule. The old 8% rate on petroleum products was removed by the Finance Act, 2023. You pay the difference between VAT you charge on sales (output tax) and VAT you paid on business purchases (input tax).
| Example | KSh |
|---|---|
| Purchase price before VAT | 10,000 |
| Input VAT at 16% | 1,600 |
| Sales price before VAT (20% margin) | 12,000 |
| Output VAT at 16% | 1,920 |
| VAT payable to KRA | 320 |
Input tax can only be claimed within six months after the end of the period in which the purchase was made, and only with a valid eTIMS invoice. Do not claim input tax from suppliers on KRA’s VAT special table; read our explainer on the KRA missing trader list.
Obligations after registration
- File a VAT return and pay by the 20th day of the following month, even when you made no sales (a nil return).
- Issue serially numbered tax invoices through eTIMS for every sale.
- Keep records of all sales and purchases.
- Tell KRA in writing within 21 days of a change of name, address or nature of business.
- Pay through an iTax payment slip at a bank or via M-Pesa Paybill 572572, using the payment registration number as the account.
Some businesses will also have 2% withholding VAT deducted by appointed agents, usually government bodies and large companies. You still file your own return and claim the withheld amount as a credit. Hotels and restaurants should also read our guide on service charge tax.
Should a small business register voluntarily?
Voluntary registration can make sense if most of your customers are VAT-registered businesses, because they can claim the VAT you charge, and you can claim VAT on your own purchases. It is usually less attractive if you sell mainly to households, because your prices go up by 16%. Registration also means monthly returns, so factor in time or an accountant’s fee.
Deregistering
A business that stops making taxable supplies must apply to deregister. One whose turnover falls below KSh5 million in a year may choose to deregister. Keep filing returns until KRA confirms deregistration.
FAQ
What is the VAT registration threshold in Kenya?
KSh5 million in taxable supplies over 12 months.
Can I register for VAT below KSh5 million?
Yes. KRA can approve voluntary registration, subject to conditions.
When are VAT returns due in Kenya?
On or before the 20th day of the following month, for both the return and the payment.
Is eTIMS required for VAT-registered businesses?
Yes. All VAT-registered taxpayers must onboard on eTIMS and issue invoices through it.
Updated October 2026.
Related: How to Start a Hardware Business in Kenya (2026): Capital, Permits and Stock
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