In Kenya, registering for taxes is processed through the Kenyan Revenue Authority (KRA). The body is also responsible for tax collection and compliance. What is generally known as a tax identification number goes by the acronym "PIN" or Personal Identification Number in Kenya. This PIN allows for easy identification of taxpayers and can be obtained by filling out an e-form on the KRA-website portal, or an actual physical copy at any of the KRA registered offices. Tax registration in Kenya is mandatory for entities doing business in the country.
Before diving into the procedure for tax registration, which is rather straightforward, it will do us good to first explore the different types of taxes paid in Kenya and requirements as to what is mandatory and what is optional. There are two types of taxes Kenyans pay and can register for. These are direct and indirect taxes. Direct taxes are paid directly to the government on income earned, while indirect taxes are paid on goods or services –such as Value Added Tax (VAT).
The law requires that you have a KRA PIN while making some transactions. These include buying and selling land, importing goods, registering a business and many more. Most of the tax obligations require you to have a PIN while filing and paying for taxes.
The process for PIN-registration differs for companies, partnerships, and individuals in Kenya.
The documents needed by a company are;
- A copy of Certificate of Incorporation.
- A copy of CR12.
- A copy of Memorandum and Article of Association.
- A copy of PIN Certificate for one of the company's directors.
- A copy of Tax Compliance certificate of one of the company's directors.
- A copy of the Acknowledgement receipt.
And for partnerships, the documents needed for PIN registration are;
- A copy of the Acknowledgement receipt.
- PIN Certificate for one of the partners.
- Deed of partnership.
- Tax Compliance certificate of the partners.
Finally for individuals, the necessary details are;
- National ID details for citizens or Passports/ID Card details for foreigners.
- In the case of an employee, their Employers' PIN details.
- Certificate of Business Registration details for individuals running businesses.
KRA Pin is mandatory for resident and non-resident directors.
KRA iTax Portal
Registration for taxes is free of charge in Kenya. Most tax processes have been automated, so this registration is completed using the iTax platform of the Kenyan Revenue Authority. The process is as simple as four steps;
- Visit the iTax website.
- Click on "New PIN Registration".
- Fill the online form; this should be done as thoroughly as possible.
- Submit the application.
A Personal Identification Number is needed for a range of business tasks, from opening a corporate bank account to obtaining a trade license.
There are two other tax registration obligations that should be noted for entities
VAT Registration in Kenya
Value Added Tax in Kenya is mandatory for all individuals, companies or partnerships that supply or expect to supply taxable goods worth Kshs. 5million or higher within a 12-month period. The process for registration is the same as PIN registration and is carried out through iTax. Kenya's new VAT regulations also require that a person supplying taxable services through a digital marketplace should register for VAT in Kenya.
Digital Service Tax Kenya
Digital Service Tax (DST) is applicable to both residents and non-residents of Kenya at a flat rate of 1.5%. Any digital service or digital market platform which caters to a user located in Kenya will be subjected to DST. Registration is through iTax and follows the listed PIN registration process. The only difference being the need to specify the kind of tax being registered for.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.