Doing Business in Kenya - RSM International

• Payment is received for all or part of the supply; or• A certificate is issued by an architect, surveyor or any person acting as aconsultant.The tax point in respect of imported services is the earlier of:• The time when the service is received;• When an invoice is received in respect of the service; or• When payment is made for all or part of the service.Where a supply is made on a continuous basis or by metered supply, the time of thesupply is the time of each determination or meter reading.The above rules are crucial in many business decisions and should be consideredvery carefully before entering into an agreement or a contract.Value of SupplyGenerally, the taxable value of a supply is:• In case of a supply to an independent party dealing at arm’s length, the price forwhich the supply is provided.• In case of supplies to related parties, the price at which the supply would havebeen provided in the ordinary course of business to an independent party.• Where the price cannot be determined, the Commissioner is empowered todetermine it.The price will include:• The cost of packaging;• Any other goods ancillary or attached to packaging;• Any other liability the purchaser has to pay to the vendor in addition to the pricecharged such as warranty, commission, financing, transport, advertising, etc.Other provision in relation to determining the value of supply• Where the terms of sale provide for any discount, the value for tax is thediscounted amount.• Where taxable goods are sold in returnable containers and the containers werepurchased or imported with tax paid, no tax will be chargeable in respect of thecontainers.• Where tax has been charged in respect of returnable containers which are thenreturned to the supplier, the supplier will be entitled to take credit for the tax inthe succeeding VAT return.48DOING BUSINESS IN KENYA