How to do your VAT registration
In Kenya, transportation of passengers is exempt from VAT except where the means of conveyance is hired or chartered. Therefore, you cannot register for VAT if your only income is from transport services supplied to Riders as the transportation services provided by you to riders is exempt from VAT in Kenya.
But you may be required to register for VAT, or you may be able to register for VAT voluntarily if you have additional income from taxable services (such as marketing and availability services) supplied to Uber or other persons. If you’re new to VAT, this page walks you through the basics of your registration process.
In this regard, you can register for VAT on KRA’s iTax portal if you provide such other taxable supplies that are worth KES 5 million and above in a given 12 month period or if you provide taxable supplies below this threshold but still desire to voluntarily register for VAT.
Failure to register for VAT where you have met the threshold above may result in a penalty being imposed by the KRA as well as the KRA compulsorily registering you for VAT. Consult a tax advisor for more details on criteria and requirements that apply to you.
What a registration entails
VAT collected from providing services
Where you are registered for VAT, you must charge and collect VAT on taxable services (such as marketing and availability services) supplied to Uber or any other persons. This is referred to as “output VAT”.
VAT charged to you on business expenses
VAT can also be charged to you by Uber and other parties where you have received a taxable supply. For example on business expenses such as car repairs, Uber’s service fee, and cleaning. This is referred to as “input VAT”.
You may be able to deduct your input VAT from the output VAT you have collected, only if you are registered for VAT. Please note that you will not be able to deduct VAT related to exempt services to the extent that over 90% of your sales are exempt and you will not be eligible to claim any input VAT in your VAT return.
More details can be found HERE
Criteria and requirements
You must register for VAT If your income from taxable services (such as marketing and availability services) supplied to Uber and other parties), exceeds KES 5 million in any consecutive 12 month period.
Once registered, please note that the deadline for the payment of VAT and submission of a VAT return is the 20th of the following month.
Failure to remit VAT attracts a penalty of 5% on the principal tax and a simple interest charged at the rate of 1% per month for the months that the tax remains due.
You shall be required to keep records regardless of your registration status for VAT.
More information can be found HERE on the KRA’s website.
We strongly recommend that you speak with a tax professional to ensure you fully understand your VAT obligations.
How to do your Small Business registration
Kenya has a Turnover tax regime which is a simplified tax system for small and medium businesses with a qualifying turnover exceeding KES 1 million but not more than KES 50 million per annum. The applicable rate is 1% on the gross monthly sales by resident persons who fall within the above specifications. Businesses subject to the Turnover Tax framework are not permitted to deduct their expenses.
Persons registered under the Turnover Tax regime are also required to register for VAT, declare and remit VAT returns on a monthly basis where their annual taxable turnover exceeds the KES 5 million threshold.
Similar to VAT, the deadline for the submission of a Turnover Tax return is the 20th of the following month and failure to pay Turnover Tax attracts a penalty of 5% on the principal tax and a simple interest charged at the rate of 1% per month for the months that the tax remains due.
To register for Turnover Tax follow the steps below:
- Open the iTax portal and enter your KRA PIN and iTax password to continue.
- Answer the numerical security question to access your iTax account.
- To Register for Turnover Tax click on the Registration menu, and select the “Amend PIN Details” option.
- In the e-Amendment of Registration form, select “Online Form” from the “Mode of Amendment* options. Then Click the “Next” Button.
- In the “Individual Registration Amendment Form” check the option of “PIN” then select “Basic Information” in the form below. Click the “Next” button.
- In Section A, of the Basic Information form, select the “YES” option on the “Do you want to register for TOT *” question. A pop up will appear below, Select “OK”
- In the Obligation Details, enter your small or medium business registration details as the “source of business income”. Then Click “Submit”
- An iTax e-Return Acknowledgement receipt will be generated, Download the e-Return Acknowledge slip for your records
See more on Turnover Tax HERE on the KRA’s website.
Your Uber profile
Uber Profile - VAT
Be sure to provide us with a valid KRA PIN number (by adding it to your Tax Profile / Invoice Settings page) and to update your tax profile in the Uber App.
Frequently asked questions
- Where do I register for VAT?
Please click HERE for online KRA PIN registration. The process of online VAT registration is as shown below;
Log into the iTax portal with your KRA PIN and password.
Where you forget or would like to reset your password, after entering your KRA PIN, click on the “Continue” button. It will open a new iTax Web Portal Page where you are supposed to enter your iTax Password and solve the arithmetic question. At the bottom of that page, you will see a link titled “Forgot Password/Unlock Account” click on that link.
After retrieving your password and logging in, on the Registration Tab, select “Amend PIN Details”.
Select “Online Form” as the “Mode of Amendment” and proceed.
Click on the “PIN” checkbox and select the “Source of Income” checkbox.
On the Obligation Details tab, select the “VAT” check box.
Select the registration date (i.e., the date you are making the application).
Input your estimated turnover for the coming year.
Then for the “Source of Income” details, select ”Yes” on the business income option.
Input your business details and click on the “add” button.
Select the “economy sector” that your business is involved in. Then click on the “add” button (Use the business registration certificate or single business permit).
Once you have completed the relevant sections, click on submit and download the acknowledgement form. (The acknowledgement form can still be retrieved from your email registered on iTax).
Consult a tax advisor for more details on the criteria and requirements that apply to you.
- How do I calculate my turnover via the Uber app?
Your turnover is the sum of the services you sold. On the Uber app this is the sales made to the Riders. However, please be aware that for tax purposes you likely need to include the turnover from any other activities you perform outside of the Uber platform too.
We suggest you contact the KRA office closest to you and/or your tax advisor to be sure you are calculating your turnover correctly!
- I receive other payments from Uber (e.g. incentives, referrals of new drivers). What should I do as regards VAT for these?
Typically, these payments are considered as services provided by you to Uber. These services may be subject to VAT in Kenya. Below are some examples of those services:
- Referrals: Getting someone you know to sign up as a driver as well helps Uber a great deal. Therefore, we sometimes pay you for rendering this referral service to us.
- Availability services provided by you to Uber: This is a supply of services rendered by you to Uber when you commit to making yourself available to perform Transportation Services via the Uber app for a certain period of time.
You may also obtain other income from the Rider:
- Cleaning fee: Charge by you to the Rider for soiling your car.
- Lost Item fee: Charge for returning an item left in the car back to a rider
Those fees may be subject to VAT and could, therefore, be included in your VAT return.
Please speak with a representative at the KRA office closest to you and/or your tax advisor to ensure you apply the right treatment.
- How are tips taxed and where can I find the amounts I have received as tips?
According to Kenyan Income Tax legislation, tips are considered part of your income and should be included in your income tax return and taxed accordingly.
We suggest speaking with a representative at the KRA office closest to you and/or your tax advisor to be sure you fully understand your tax obligations!
- How do I know if I need to register for VAT?
You must register for VAT if your income from taxable services (such as marketing and availability services) supplied to Uber or any other person, exceeds KES 5 million in any consecutive 12 month period.
You may also register for VAT voluntarily if you make taxable supplies and your taxable annual turnover does not exceed the stated annual threshold of KES 5 million.
More information can be found HERE on the KRA’s website.
We strongly recommend that you speak with a tax professional to ensure you fully understand your VAT obligations.
- How do I ensure my compliance?
If you are required to register for VAT make sure you do so as soon as possible. Also, make sure you submit VAT returns by the 20th day of the following month together with any payments of VAT due to the KRA.
- How do I submit my VAT return?
Through the KRA’s iTax portal.
- Is there VAT on the service fee I pay to Uber?
Uber is registered as a VAT vendor with the KRA from April 2021 and charges VAT at 16% on its service fee and booking fee only to Partners who have not provided Uber with a PIN. For Partners who have provided Uber with a PIN, we consider that they account for the VAT due on the service fee under the reverse charge mechanism per Kenyan tax laws.
** Uber remits the VAT collected to KRA as part of our commitment to comply with Kenyan tax laws.
Every Partner is unique and so are their specific tax circumstances. As such, the information on this page may not cover your tax needs and it should not be relied upon to replace you seeking independent tax advice. Uber can’t provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor to get tailored help and advice for your specific circumstances. The information on this page is for Kenyan audiences only.
Last updated on 01 Jan 2022
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