close
Share with your friends

Kenya: VAT refunds and “bad debts”

Kenya: VAT refunds and “bad debts”

Taxpayers in Kenya that provide taxable supplies to customers and that charge, account for, and remit value added tax (VAT) may be eligible for a refund of the VAT regarding “bad debts.” The refunds would be available pursuant to section 31 of the VAT law.

1000

Related content

The VAT law in Kenya requires registration by those providing taxable supplies having a value of KES 5 million or more during the applicable period. VAT-registered persons are required to charge, account for, and remit VAT on taxable supplies to customers by the 20th day of the subsequent month.

Section 31 of the VAT law provides that if a customer fails to pay for the supplies despite the supplier remitting the amount of VAT to the tax authority, the VAT-registered person is allowed to apply for a refund on VAT paid on “bad debts” that have remained unpaid for more than three years, provided that the taxpayer has:

  • Made a supply and has accounted for and paid VAT on that supply
  • Not received any payment from the customer

The application for refund must be made within five years from the date of the supply for which the related VAT payments were made.


Read a 2020 report [PDF 423 KB] prepared by the KPMG member firm in Kenya

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal