Data entry errors made when generating an invoice may be corrected through issuance of credit notes or debit notes  which must reference the original invoice number.

Where the property has both residential and commercial tenants, the income will be treated as follows:

Where the gross annual  rental income is Kshs. 288,000 or less than Kshs. 15 million, all rental income is combined in the annual Income Tax return.

Where the gross annual rental income is from the commercial tenants and or combined (residential & commercial) and is more than Kshs. 15 million, this part of the income is accounted for as the commercial rental income and taxed at either individual graduated scale or corporate rate of 30%. Remember withholding Tax on the Rental Income will also apply.

Expenses being claimed under the commercial rental income portion should be apportioned in the same ratio as the income of the commercial rent pertains to the total income.

This is a tax on gross residential rental income between 288,000 (ksh. 24,000 per month) and 15,000,000 per annum and the tax is 10% on gross rent payable monthly on rent received.

You may elect to file and pay tax either in the Monthly regime  (if the income is between 288,000 PA or 24,000PM and upto Kshs15,000,000) or the Annual regime if the income is above Kshs15,000,000.

Every person pays taxes as per the tax obligations registered under their PINs

Yes

iTax system restricts the addition of certain obligations, which have to be approved at the stations. There are also sector based trainings targeting the cyber attendants and taxpayers. Taxpayer with wrong obligations do write to their respective tax station for rectification.

This happens where the employer has not filed The PAYE returns in iTax, but with The employee having The evidence of PAYE deduction, The issue is sorted at their tax stations.

We advise such taxpayers to seek services at our iTax support centres, Huduma centres and nearest KRA office

KRA is conducting trainings country wide and There are you tube videos to guide on The same. KRA is also working on simplifying The return filling systems.

By adopting a compliant ETR. This is what you need to do:

1. Refer to the KRA website for the list of approved ETR Suppliers to get in touch with.
2. Once you acquire a compliant ETR, the device will be auto activated through iTax to enable invoice validation and transmission to KRA.
3. In order to activate the ETR, the VAT taxpayer is required to acknowledge the ETR assigned to them by responding to the confirmation email from iTax

• Fostering a fair business environment
• Pre-filled VAT return; simplified return filing
• Auto activation of the Electronic Tax Register
• Faster processing of VAT refunds
• Non-intrusive verification of tax matters

Where a taxpayer replaces the existing tax register, they are required to safeguard the previously used tax register in line with requirement to keep records for five years as stipulated in Section 23 of the Tax Procedures Act, 2015 (TPA).

1. Validation of invoice data at the point of issuing an invoice
2. Generation of a unique QR code
3. Generation of a unique invoice number for every invoice/receipt; control unit invoice number
4. Transmission of the electronic tax invoice to KRA on a real-time or near real time basis
5. Capture of buyer PIN (optional); only for those who intend to claim input VAT
6. Generation of credit and debit notes to correct or amend an invoice

• PIN and Name of trader;
• Time and Date of the Invoice;
• Description of goods/services
• Unit cost;
• Quantity of supply
• Total Gross Amount;
• Total Tax Amount;
• Tax Rate;
• Unique invoice number;
• Unique ETR identifier/serial number;
• Digital Signature (QR Code);

Yes. The VAT taxpayer should continue using the tax register as usual. The process of invoice validation and generation of the QR code by the ETR does not require internet connection.

Once the internet connectivity is restored, the invoices generated and stored in the tax register’s memory will be automatically transmitted to KRA.

Yes. The ETRs have the ability to generate credit or debit notes for purposes of amending or correcting invoices. The credit/debit note will also be transmitted to KRA and must make reference to the original invoice number.

Withholding Income Tax is tax withheld at source. A person making certain payments deducts tax, at the applicable rate, and remits the tax to the Commissioner on behalf of the recipient. Examples of payments subject to withholding tax include, among others: -

• Management, professional or training fees
• Consultancy fees, Legal fees, Audit fees
• Contractual fees
• Winnings
• Appearance at or performance to entertain
• Royalties
• Interest and deemed interest
• Dividends

The person making the payment deducts tax prior to paying the amount due. The tax withheld/deducted is then remitted to the KRA. The payer is required to generate a withholding tax certificate on iTax which is automatically sent to the payee once the payer remits the withholding tax to KRA. Withholding tax deducted should be remitted to KRA by the 20th day of the month following the month in which the tax was deducted.

Withholding tax is claimable by the payee when filing their annual tax returns and is not an additional tax