Kenya VAT codes and rates
Kenya charges VAT at 16%. When you create a company in Kenya, Nefin sets up 3 sales and 5 purchase codes, each tied to a box of the VAT3 return. Every invoice and bill line carries one, so the return's totals add themselves up as you work. They fill the VAT3 - Details of Sales and the VAT3 - Details of Purchases, ready to file every month.
VAT codes from the VAT3 return
Each code is the box or line it fills on the VAT3 return, named in the authority’s own wording. Pick one on an invoice or bill line and the amount lands in that box.
| Code | What it covers | Rate |
|---|---|---|
| B | General rated supplies 16% (Section B)Default | 16% |
| D | Zero rated supplies incl. exports (Section D) | 0% |
| E | Exempt supplies (Section E) | 0% |
| Code | What it covers | Rate |
|---|---|---|
| F | General rated purchases 16%, local and imports (Section F)Default | 16% |
| H | Zero rated purchases (Section H) | 0% |
| I | Exempt and non-VAT purchases (Section I) | 0% |
| J | Imported services (Section J) | 0% |
| NR-ND | Prohibited input tax 16%, s.17(4) (disallowed) | 16% |
Kenya VAT books
One row per invoice or bill, one column per return box. Nefin builds both books from the codes above.
Sales book
VAT3 - Details of Sales
Sales
- [B]Section B - General Rated Supplies
- [D]Section D - Zero Rated Supplies
- [E]Section E - Exempt Supplies
Totals Nefin calculates
- [B-VAT] Section B - Output VAT (16%)Sum of the tax charged in [B]
- [SALES] Total sales (B + D + E)Sum of the net amounts in [B] + [D] + [E]
Purchase book
VAT3 - Details of Purchases
Purchases
- [F]Section F - General Rated Purchases (local, imports, digital)
- [H]Section H - Zero Rated Purchases
- [I]Section I - Exempt Purchases
Imported services
- [J]Section J - Imported Services
Disallowed
- [NR-ND]Purchases with prohibited input tax (s.17(4))
Totals Nefin calculates
- [F-VAT] Section F - Input VAT (16%)Sum of the tax charged in [F]
- [J-VAT] Section J - VAT on imported services (16%)Net amount × 16%, from [J]
- [INPUT] Total input tax (F + J)Total of [F-VAT] + [J-VAT]
Source
These codes were transcribed from the tax authority's own form or instructions: KRA Step-by-step guide on filing the auto-populated VAT return (VAT3) in iTax, 27-11-2023 - https://www.kra.go.ke/images/publications/Pre-populated-VAT-return-Step-by-Step-Guide-27-11-2023.pdf.
Frequently asked questions
What is the VAT rate in Kenya?
The standard rate is 16%. Zero-rated, exempt and reverse-charge transactions use their own 0% codes.
Which VAT codes does Nefin set up for a company in Kenya?
3 sales codes and 5 purchase codes, each named after the VAT3 return box it fills, for example B (General rated supplies 16% (Section B), 16%), D (Zero rated supplies incl. exports (Section D), 0%) and E (Exempt supplies (Section E), 0%).
How often is the VAT3 return filed?
Nefin defaults to monthly filing, the usual period for a small or medium registered business in Kenya. Your tax authority may assign you a different one.
Are these Kenya VAT codes official?
Yes. They were transcribed from the tax authority's own form or filling instructions (KRA Step-by-step guide on filing the auto-populated VAT return (VAT3) in iTax, 27-11-2023 - https://www.kra.go.ke/images/publications/Pre-populated-VAT-return-Step-by-Step-Guide-27-11-2023.pdf).
Does Nefin produce the Kenya VAT books?
Yes. The VAT3 - Details of Sales lists every invoice and the VAT3 - Details of Purchases every bill, one row per document with a column for each return box, plus the totals the return asks for.