Doing Business in Kenya - RSM International

4.8 Value Added Tax4.8.1 Basic Concepts and RatesThe operation of VAT has its legal basis in The Value Added Act (Cap 486). TheSchedules referred to below are Schedules of the VAT Act.VAT is levied on:• The supply of goods or services, where it is a taxable supply made by a taxableperson in Kenya in the course of or in furtherance of any business; or• The importation of taxable goods or services into Kenya.VAT is payable by the:• Taxable person making the taxable supply;• The importer of imported goods; or• The recipient of imported services (reverse VAT).A taxable person who makes or intends to make taxable supplies of taxable goods orservices, or both, the value of which is Shs 5 million or more in a period of 12 monthsis required to be registered under the VAT Act. In the case of an importer of goods orservices, the onus to pay VAT is on the importer.A non-resident business who supplies taxable goods or services through a permanentestablishment or a branch in Kenya is required to obtain registration through aresident representative. Moreover, where the supplier of the service is a residentoutside Kenya, the Commissioner may by notice in writing appoint a person who isnormally resident in Kenya, as an agent for collecting the tax payable on the serviceand remitting it to the Commissioner.DOING BUSINESS IN KENYA43