conversations
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[
{
"from": "human",
"value": "My PIN has been stopped on iTax. What should I do?"
},
{
"from": "gpt",
"value": "Kindly contact your tax station for clarification on this."
}
] |
[
{
"from": "human",
"value": "My name has been wrongly spelled in iTax"
},
{
"from": "gpt",
"value": "The taxpayer is required to send his PIN together with scan colored copies of his original ID card or certificate of incorporation for data correction through the email callcentre@kra.go.ke"
}
] |
[
{
"from": "human",
"value": "I am a Non- Kenyan Non- Resident whose name was captured wrongly on iTax. Is there a way to correct this?"
},
{
"from": "gpt",
"value": "We currently do not have an amendment function for names for those PINs linked to passports."
}
] |
[
{
"from": "human",
"value": "What do I do after registering and can see only two icons (change password and logout)?"
},
{
"from": "gpt",
"value": "Normally a taxpayers profile will be fully populated will all icons within 24 hours upon registration. However a taxpayer intending to transact immediately can send this PIN to KRA through: email Callcentre@kra.go.ke\nOr;\nCall 0711099999\nOr;\nSend a Direct Message (DM) via Facebook or Twitter using the offical KRA pages.\nOr;\nVisit the nearest KRA office"
}
] |
[
{
"from": "human",
"value": "What to do when the system prompts you to at least have one of the tax obligations."
},
{
"from": "gpt",
"value": "This happens especially in the case of an individual registration.\nJust send this PIN to KRA through:\nemail Callcentre@kra.go.ke and DTDOnlineSupport@kra.go.ke\nOr;\ncall 020 2390919 and 020 2391099 and 0771628105\nOr;\nVisit the nearest KRA office and request for the obligation."
}
] |
[
{
"from": "human",
"value": "Who should update iPage?"
},
{
"from": "gpt",
"value": "All taxpayers (individuals, companies, parastatals, NGOs, etc) should update their information using the iPage.\nWhen logging for the first time, the initial requirement will be updating iPage."
}
] |
[
{
"from": "human",
"value": "Why should I update my iPage?"
},
{
"from": "gpt",
"value": "iTax provides for capture of additional registration data not previously captured. The information required in iTax includes among others your county, employer, cell phone contact, unique email address, tax agent, etc."
}
] |
[
{
"from": "human",
"value": "When should I update my iPage?"
},
{
"from": "gpt",
"value": "Taxpayers are required to update their iPage on first log in to iTax."
}
] |
[
{
"from": "human",
"value": "Where can I update my iPage?"
},
{
"from": "gpt",
"value": "Go to https://itax.kra.go.ke\nOr;\nVisit the KRA website www.kra.go.ke. Click on Online services and select PIN Registration to access the iTax portal."
}
] |
[
{
"from": "human",
"value": "How do I update my iPage?"
},
{
"from": "gpt",
"value": "One is required to fill in the mandatory fields especially under basic information then submit the data so as to update the taxpayers information with KRA."
}
] |
[
{
"from": "human",
"value": "What do I do if my PIN is not recognized when I try to update my iPage?"
},
{
"from": "gpt",
"value": "This happens for new PINs that have not been migrated to iTax. The taxpayer is required to send this PIN to KRA for migration through;\nEmail Callcentre@kra.go.ke and DTDOnlineSupport@kra.go.ke\nOr;\nCall 020 2390919 and 020 2391099 and 0771628105\nOr;\nVisit the nearest KRA office."
}
] |
[
{
"from": "human",
"value": "Do I need a VAT certificate if I have a PIN certificate?"
},
{
"from": "gpt",
"value": "No. PIN certificate is sufficient.\nWhat the taxpayer needs to do if they start dealing in vat-able business is to add VAT obligation on the PIN."
}
] |
[
{
"from": "human",
"value": "What happens when we try to update iPage and the data is not consistent with the database?"
},
{
"from": "gpt",
"value": "The taxpayer is required to send this PIN to KRA for data correction through;\nEmail Callcentre@kra.go.ke and DTDOnlineSupport@kra.go.ke\nOr;\nCall 020 2390919 and 020 2391099 and 0771628105\nOr;\nVisit the nearest KRA office."
}
] |
[
{
"from": "human",
"value": "I am trying to register but I keep getting error ref. no. 139.....what do I do?"
},
{
"from": "gpt",
"value": "This happens when there is poor internet connectivity.\nSorry, but be patient and keep trying."
}
] |
[
{
"from": "human",
"value": "What do I do if I have Error in date of birth or certificate of incorporation?"
},
{
"from": "gpt",
"value": "The taxpayer is required to send this PIN to KRA for data correction through:\nEmail Callcentre@kra.go.ke and DTDOnlineSupport@kra.go.ke\nOr;\nCall 020 2390919 and 020 2391099 and 0771628105\nOr;\nVisit the nearest KRA office."
}
] |
[
{
"from": "human",
"value": "What do I do if Income tax date comes before business commencement date?"
},
{
"from": "gpt",
"value": "The taxpayer is required to send this PIN to KRA for data correction through:\nEmail Callcentre@kra.go.ke and DTDOnlineSupport@kra.go.ke\nOr;\nCall 020 2390919 and 020 2391099 and 0771628105\nOr;\nVisit the nearest KRA office."
}
] |
[
{
"from": "human",
"value": "What is iTax?"
},
{
"from": "gpt",
"value": "iTax is a system that has been developed by KRA to improve on efficiency.\niTax allows you to register for a PIN, file your tax returns, apply for a tax compliance certificate, generate a payment slip, check your ledger account among others."
}
] |
[
{
"from": "human",
"value": "How does iTax work?"
},
{
"from": "gpt",
"value": "iTax allows one to update their tax registration details, file tax returns, register all tax payments and make status enquiries with real-time monitoring of their ledger/account."
}
] |
[
{
"from": "human",
"value": "How do I access iTax?"
},
{
"from": "gpt",
"value": "To log on to iTax, visit itax.kra.go.ke and follow the prompts."
}
] |
[
{
"from": "human",
"value": "I am trying access the portal but I keep getting error ref. no. 148..... What do I do?"
},
{
"from": "gpt",
"value": "This happens when there is network fluctuation. Please be patient and keep trying."
}
] |
[
{
"from": "human",
"value": "Does KRA offer training on iTax?"
},
{
"from": "gpt",
"value": "Yes. Training is done free of charge every first two Thursdays of the month at the Convention Centre, 5th floor Times Tower."
}
] |
[
{
"from": "human",
"value": "Can I file all returns on iTax?"
},
{
"from": "gpt",
"value": "Yes you can.\nFirst, you need to login into the system then go to the returns tab and select file return and download the return.\nYou need to fill the return offline before you generate a zipped file that you will upload."
}
] |
[
{
"from": "human",
"value": "How do I treat Credits from a previous VAT return?"
},
{
"from": "gpt",
"value": "On the VAT return at the Tax Due worksheet, you can be able to put the figure at from the previous months credit."
}
] |
[
{
"from": "human",
"value": "If I dont have PINs for my suppliers what should I do?"
},
{
"from": "gpt",
"value": "Invoice without PIN is not valid tax invoice & therefore not allowed for tax deduction."
}
] |
[
{
"from": "human",
"value": "How do I treat Credit notes in iTax?"
},
{
"from": "gpt",
"value": "iTax has provided for inclusion of the credit notes in the return. While filling the returns one needs to input a negative figure but quote the invoice relating to the credit note."
}
] |
[
{
"from": "human",
"value": "Can I correct an error once I file a return?"
},
{
"from": "gpt",
"value": "Yes.\nYou can do this by filing an amended return."
}
] |
[
{
"from": "human",
"value": "I have heard that before one can complete the Excel Return one is required to enable MACROS on the excel sheet. What is enabling MACROS and how does one do this?"
},
{
"from": "gpt",
"value": "MACROS are inbuilt formulae in Excel that should be enabled once you download the return so that you can be able to fill in the details of the return.\nEnabling MACROS is on the read me section of the return and it gives you a step by step guide depending on the Excel version you have."
}
] |
[
{
"from": "human",
"value": "My business system produces a lot of data. With the Excel returns I will be required to fill every cell to input my data. This is cumbersome and time consuming. What will you do to facilitate and eliminate this inconvenience?"
},
{
"from": "gpt",
"value": "You can be able to do the returns in Excel and import the information to the return. You need to save this information in CSV (Comma delimited) for further information please contact KRA certified Intermediary agents, or call 020 2390919 and 020 2391099 and 0771628105."
}
] |
[
{
"from": "human",
"value": "I have a PIN but have not traded. Do I have to file returns?"
},
{
"from": "gpt",
"value": "Yes you need to file a NIL return.\nAll you need to do is go to your iTax profile, Returns, and select the NIL return option and submit."
}
] |
[
{
"from": "human",
"value": "What do I do if I am trying to upload my return but system tells me I have to file returns for previous months/year?"
},
{
"from": "gpt",
"value": "In the case of first time filling you need to call KRA for the change of roll-out date. In the case that you had filled the first return on iTax and failed to file subsequent returns i.e. for one or three months, you need to file the missing returns in iTax before you can file the current one."
}
] |
[
{
"from": "human",
"value": "What do I do if I am trying to file VAT/PAYE return on iTax but system tells me I am not registered for that return?"
},
{
"from": "gpt",
"value": "You need to update your tax obligation information in your iTax account to enable you to file."
}
] |
[
{
"from": "human",
"value": "Can I view a copy of the previous returns that I have filed for previous tax periods?"
},
{
"from": "gpt",
"value": "Yes. You login to your account, select the returns tab then consult return. You need to select the type of return and the period."
}
] |
[
{
"from": "human",
"value": "What is a return of income?"
},
{
"from": "gpt",
"value": "Declarations of all the incomes of a person in the given year of income."
}
] |
[
{
"from": "human",
"value": "Are the returns available on iTax?"
},
{
"from": "gpt",
"value": "Yes"
}
] |
[
{
"from": "human",
"value": "What income is to be declared?"
},
{
"from": "gpt",
"value": "All taxable income"
}
] |
[
{
"from": "human",
"value": "If one does not have income and has a KRA PIN are you required to file a return?"
},
{
"from": "gpt",
"value": "Yes, they are to file NIL returns for the period without income."
}
] |
[
{
"from": "human",
"value": "Who is required to submit a KRA tax return?"
},
{
"from": "gpt",
"value": "Any individual who has an active PIN as per the requirements of the registered obligations under the PIN."
}
] |
[
{
"from": "human",
"value": "Why does the commissioner not consider removing the requirement of filling of income tax individual returns by employees who have no other source of income?"
},
{
"from": "gpt",
"value": "The income tax individual return is a requirement under section 52 of the income tax act."
}
] |
[
{
"from": "human",
"value": "Why does KRA require taxpayers to file income tax individual returns yet the employers had filed the paye retuns?"
},
{
"from": "gpt",
"value": "The employer files PAYE returns to declare taxes deducted from their employees. The employee files The returns to declare their total incomes ie(farming income, business income, employment income, interest, commissions among others)"
}
] |
[
{
"from": "human",
"value": "What is a P9?"
},
{
"from": "gpt",
"value": "A summary of The employment income received in The given year,its issued by The employer to employees"
}
] |
[
{
"from": "human",
"value": "I am unable to edit the details on my ITR return."
},
{
"from": "gpt",
"value": "Editing of fields for the Income Tax Return, ITR for employment income only has been disabled. If a taxpayer who opts to use this auto populated return notices a discrepancy, they should proceed to file the return using the excel IT1 return."
}
] |
[
{
"from": "human",
"value": "Under what circumstances would it be mandatory for me to file the excel IT1 return?"
},
{
"from": "gpt",
"value": "If your employer is not remitting PAYE through iTax like the MDAs(Ministry, Departments and Agencies of government) especially those using IFMIS then the PAYE credits will not be posted to your ledger and hence you should file the IT1 returns using the excel form.\nIf you have a WHT certificate or any other income apart from employment."
}
] |
[
{
"from": "human",
"value": "I am not able to reprint my income tax withholding certificates."
},
{
"from": "gpt",
"value": "Retrieve the WHT certificate details from the certificates tab. Reprint WHT certificate- Consult"
}
] |
[
{
"from": "human",
"value": "What should a person living with disability indicate as the Certificate Date when filing the IT1 Return?"
},
{
"from": "gpt",
"value": "The date to indicate is dependent on various scenarios.\nIf the exemption certificate was renewed before the period you are filing the IT1 return, use the exemption certificate dates as from 01/01/year to 31/12/year.\nIf the exemption certificate was renewed within the tax period of filing the return the IT1 return can be filed by declaring both the expired one and the renewed exemption certificate."
}
] |
[
{
"from": "human",
"value": "What happens to Previous Returns filed by person living with disability whereby the return could not accept Two, 2 Exemption Certificates?"
},
{
"from": "gpt",
"value": "Prior cases can now be amended on iTax to ensure that relief amounts are gotten for a full period as per the Income Tax Act."
}
] |
[
{
"from": "human",
"value": "What happens to Previous Returns filed by person living with disability whereby the return could not accept Two, 2 Exemption Certificates?"
},
{
"from": "gpt",
"value": "Prior cases can now be amended on iTax to ensure that relief amounts are gotten for a full period as per the Income Tax Act."
}
] |
[
{
"from": "human",
"value": "How do the new tax rates apply when filing PAYE returns?"
},
{
"from": "gpt",
"value": "Depending on the period declared in the basic information the return will apply the relevant rates and reliefs applicable for that period e.g. if you select return period as 01/01/2017 to 31/12/2017 then the return will use the new rates and reliefs as per the Finance Act 2016."
}
] |
[
{
"from": "human",
"value": "Can I correct an error once I file a return, amendments?"
},
{
"from": "gpt",
"value": "Yes. You can do this by filing an amended return."
}
] |
[
{
"from": "human",
"value": "How does one enable MACROS on the Excel Return?"
},
{
"from": "gpt",
"value": "MACROS are inbuilt formulae in Excel that should be enabled once you download the return so that you can be able to fill in the details of the return. Enable MACROS under File - Options- Trust Center- Trust Center Settings- Macro Settings- Check to enable all macros- Check trust access to the VBA project model."
}
] |
[
{
"from": "human",
"value": "Can I view a copy of the previous returns that I have filed?"
},
{
"from": "gpt",
"value": "Yes. Log on to your account, select returns then consult return. You need to indicate the type of return and the period."
}
] |
[
{
"from": "human",
"value": "What Corporation Tax incentives do newly listed companies enjoy?"
},
{
"from": "gpt",
"value": "Currently the Income Tax Act does not offer a preferential tax regime for newly listed companies. These provisions were deleted effective 25th April, 2020 by The Tax Laws (Amendment) Act, 2020."
}
] |
[
{
"from": "human",
"value": "Are EPZ exempt from Corporation Tax?"
},
{
"from": "gpt",
"value": "Yes.\nAn Export Processing Zone (EPZ) enterprise which does not engage in any commercial activities is exempted from paying any corporation tax for a period of 10 years starting with the year in which production, sales or receipts relating to the activities for which that enterprise has been licensed as an EPZ enterprise commence.\n After the 10th year, the corporation rate of tax will be 25% for the period of 10 years commencing immediately thereafter.\n“Commercial activities” referred to above, include trading in, breaking bulk, grading, repacking, or relabelling of goods and industrial raw materials\nThough exempt from corporation tax, there following are tax obligations that the EPZ enterprise would be liable for during the period in which it is exempt from corporation tax:\n\ti. The enterprise shall be deemed to be a non-resident subject to a non-resident rate of withholding tax on payments made to the enterprise. Where such payments are made by a person who is not an EPZ enterprise, the tax shall be final tax; and\n\tii. Payments by an export processing zone enterprise to any person other than a resident person shall be deemed to be exempted from tax.\n\tiii. The employees and directors, other than non-residents, of an export processing zone enterprise shall be liable to tax on their employment income and the EPZ enterprise employing them will be required to deduct and remit tax from their employment income.\nIt is important to note that for the period an EPZ enterprise is exempt, it will still be required to submit an annual return of income.\nIn the event of failure to submit a return or late submission of a return, the enterprise will be liable to a penalty of two thousand shillings per day for as long as the return remains unfiled. This penalty shall for purposes of provisions relating to the deduction and recovery of the tax be deemed to be tax."
}
] |
[
{
"from": "human",
"value": "Do Partnerships pay Corporation Tax?"
},
{
"from": "gpt",
"value": "No.\nPartnerships do not pay corporation tax. Partnership income is declared through the partnership return.\nThe table income is distributed to the individual partners as per the agreed profit sharing ratios.\nThe share of profit then forms part of each individual's partner’s income. It will be added to any other income and the total income taxed accordingly."
}
] |
[
{
"from": "human",
"value": "Do self-employed people pay Corporation Tax?"
},
{
"from": "gpt",
"value": "No.\nSelf-employed people and Sole proprietorships are not subject to corporation tax.\nThey are required to declare their total income of the year in the Individual Income Tax Return and pay Income Tax."
}
] |
[
{
"from": "human",
"value": "Can I claim my company expenses?"
},
{
"from": "gpt",
"value": "When filing your Corporation Tax Return (also referred to as Income Tax - Company Return) you are only allowed to claim expenses that have been wholly and exclusively incurred in the production of your income as guided in section 15 and 16 of the Income Tax Act, Cap. 470."
}
] |
[
{
"from": "human",
"value": "What if I had incurred losses?"
},
{
"from": "gpt",
"value": "A company is allowed to carry forward its losses that will be offset against future taxable income.\nHowever, losses cannot be transferred to a different entity.\nCompanies in the extractive industry e.g. mining, oil and gas industries, are only allowed to carry their losses forward for a period of three years, from the year of income in which the loss arose."
}
] |
[
{
"from": "human",
"value": "What if I had incurred losses?"
},
{
"from": "gpt",
"value": "A company is allowed to carry forward its losses that will be offset against future taxable income.\nHowever, losses cannot be transferred to a different entity.\nCompanies in the extractive industry e.g. mining, oil and gas industries, are only allowed to carry their losses forward for a period of three years, from the year of income in which the loss arose."
}
] |
[
{
"from": "human",
"value": "Do I need to have an auditor?"
},
{
"from": "gpt",
"value": "Yes.\nYou should ensure that you get a certified auditor, to verify the records used to prepare your financial statements."
}
] |
[
{
"from": "human",
"value": "How to account for investment deductions."
},
{
"from": "gpt",
"value": "*Buildings (Including Hotels)*\n- Building plans and architect's certificates.\n- Bills of quantities\n- Local authority occupation certificates.\n- Factory layout sketches showing the location of machinery.\n- Other supporting documents to support the expenditure incurred e.g. suppliers' invoices, contract documents, certificates of occupation etc.\n*Plant and Machinery*\n- Suppliers invoices and vouchers.\n- Customs documents where machinery is imported.\n- Clearing and forwarding documents.\n- Documents to support foreign currency transactions.\n- Documents to support cost of installation of machinery.\n*NOTE:* To make it easier for us to examine the documents, prepare a breakdown of the costs and the relevant supporting documents."
}
] |
[
{
"from": "human",
"value": "How to account for dividends and bonuses paid by a cooperative society as allowable deductions."
},
{
"from": "gpt",
"value": "Dividends and bonuses are treated as allowable deductions, against total taxable income.\n- A Society designated co-operative society, other than a designated primary society can pay 100% of total income as dividends to and bonuses to its members.\n- The dividiends are subject to Withholding Tax at the rate of 15%, treated as Qualifying Dividends while bonuses would be subject to PAYE.\n- If a Society dividends and bonuses do not comprise 100% of total taxable income, then the remaining amount is subjected to 30% corporate tax\n- The dividends and bonuses payable cannot exceed 80% 100% of the society’s total income.\n_designated co-operative society_ means a co-operative society registered under the Co-operative Societies Act;\n_primary society_ means a co-operative society registered under the Co-operatives Societies Act whose membership of which is restricted to individual persons.\nDeducting dividends and bonuses from adjusted income only happens if;\n- Payment is made in cash or by cheque to the members.\n- Payment is approved at the AGM by the members of the primary co-op society.\n- Payment is approved by the commissioner of co-op societies."
}
] |
[
{
"from": "human",
"value": "What are the prevailing income tax rates?"
},
{
"from": "gpt",
"value": "- On the first Kshs 24,000 per month or Kshs 288,000 per annum\n- On the next Kshs 8,333 per month or Kshs 100,000 per annum\n- On all income amounts in excess of Kshs 32,333 or Kshs 388,000 per annum\nThe applicable monthly personal relief is Kshs. 2,400 per month or Kshs 28,800 per annum."
}
] |
[
{
"from": "human",
"value": "Does PAYE include earnings from casual employment?"
},
{
"from": "gpt",
"value": "No.\n'Casual employment' in this case refers to employment that is under one month.\nRegular part-time employees and regular casual employment, where the employees are employed casually but regularly, are not considered to be casual employees."
}
] |
[
{
"from": "human",
"value": "Are employee benefits taxable?"
},
{
"from": "gpt",
"value": "Yes.\nWhere an employee enjoys a benefit, advantage or facility of whatsoever nature in connection with employment or services rendered; the value of such benefit should be included in the employee's earnings and charged to tax."
}
] |
[
{
"from": "human",
"value": "Tell me about taxation of loans to employees"
},
{
"from": "gpt",
"value": "Sometimes employers provide loans to their employees and charge an interest lower than the prescribed rate. This becomes a benefit to the employee, for which the employer needs to file and pay Fringe Benefit Tax.\nThe difference between the prescribed rate and the employer's loan rate is chargeable to tax, on the employee. The taxable value of fringe benefit tax is the difference between the market interest rate and the actual interest paid on the loan.\nExample:\nKen gets a loan of Kshs. 3,000,000\nLoan amount: Kshs.3,000,000\nInterest charged: 3%\nMarket Interest rate for the month: 9%\nFringe Benefit is (9% - 3% = 6%) = Kshs.3,000,000 x 6% =180,000 p.a\ni.e. Kshs. 15,000 per month.\nFringe Benefit tax payable by employer is Kshs. 15,000 x 30% = Kshs. 4,500/- for the month"
}
] |
[
{
"from": "human",
"value": "How are loans to employees taxed?"
},
{
"from": "gpt",
"value": "This is a tax on loans to employees.\nWhen an employer provides a loan to an employee and charges interest below the prescribed rate of interest, then the difference between the prescribed rate and the employer's loan rate is a benefit from employment, that the employee should pay tax for.\nThis is type of tax is called Fringe Benefit Tax"
}
] |
[
{
"from": "human",
"value": "What is Withholding Income Tax?"
},
{
"from": "gpt",
"value": "Withholding Income Tax is tax withheld at source. A person making certain payments deducts tax, at the applicable rate, and remits the tax to the Commissioner on behalf of the recipient. Examples of payments subject to withholding tax include, among others: \n\ta. Management, professional or training fees\n\tb.Consultancy fees, Legal fees, Audit fees\n\tc. Contractual fees\n\td. Winnings\n\te. Appearance at or performance to entertain\n\tf. Royalties\n\tg. Interest and deemed interest\n\th. Dividends"
}
] |
[
{
"from": "human",
"value": "How does withholding tax work?"
},
{
"from": "gpt",
"value": "The person making the payment deducts tax prior to paying the amount due. The tax withheld/deducted is then remitted to the KRA. The payer is required to generate a withholding tax certificate on iTax which is automatically sent to the payee once the payer remits the withholding tax to KRA. Withholding tax deducted should be remitted to KRA by the 20th day of the month following the month in which the tax was deducted.\nWithholding tax is claimable by the payee when filing their annual tax returns and is not an additional tax"
}
] |
[
{
"from": "human",
"value": "What is the penalty for failure to deduct withholding tax?"
},
{
"from": "gpt",
"value": "Where a payer fails to withhold tax, the tax shall be deemed to be due and payable by him as though he was the person who earned the income and the due date for the payment shall be the date on which the amount of tax should have been remitted to KRA.\nA late payment penalty of 5% shall also apply on the tax due together with a late payment interest of 1% per month for the period that the tax remains unpaid."
}
] |
[
{
"from": "human",
"value": "Is withholding tax a final tax?"
},
{
"from": "gpt",
"value": "There are a few instances where withholding tax is a final tax.\nWithholding tax is final when deducted in relation to a payment made to a non-resident person with no permanent establishment in Kenya\nWith regard to payments to resident persons, withholding tax is a final tax when it relates to winnings, qualifying interest, qualifying dividend and pensions.\nIn every other case, withholding tax is not a final tax. The taxpayer (payee) is required to declare their income(s) and the withholding tax details when filing their annual tax returns and to pay any balance of tax due."
}
] |
[
{
"from": "human",
"value": "Can an employer choose to either pay their staff using the withholding tax or PAYE regime?"
},
{
"from": "gpt",
"value": "Employees are subject to PAYE taxes. The rates applicable are the individual tax (graduated scale) rates and the employer may take into account allowable deductions (such as mortgage interest) and reliefs (such as personal relief and insurance relief) when computing the PAYE."
}
] |
[
{
"from": "human",
"value": "What are the withholding tax rates?"
},
{
"from": "gpt",
"value": "Huge table"
}
] |
[
{
"from": "human",
"value": "What does a taxpayer require to apply for addition of VAT obligation?"
},
{
"from": "gpt",
"value": "KRA has restricted the addition of VAT obligation and set the following conditions and mandatory documentary requirements for approval of the same;\n1. Original CR12 for companies and Identity documents for directors or individuals including National Identity cards, passports or Alien Identity Cards;\n2. Business permit from relevant bodies;\n3. Work permits for aliens;\n4. Tax Compliance Certificates for all directors;\n5. Letter of appointment of Tax Representative for non-resident companies and identity documents of directors for companies with non-resident directors;\n6. Contact details including physical address, verified telephone contacts, email addresses, utility meter numbers and documents, office rent agreements;\n7. The website(s) or uniform resource locators (URLs) of the supplier through which business is conducted, where applicable;\n8. Contract agreements and/or sample invoices;\n A Taxpayer who meets the above requirements can proceed to make an application for addition of VAT obligation."
}
] |
[
{
"from": "human",
"value": "What is VAT Special Table?"
},
{
"from": "gpt",
"value": "It is a mechanism implemented in iTax to enhance VAT compliance where certain categories of VAT registered taxpayers are restricted from performing certain processes. The following are categories so far on boarded on the special table:\nNil filers and Non-filers – This refers to Taxpayers who have either not filed returns or have consecutively filed NIL returns for a specified period.\n Missing Traders – This refers to taxpayers who are filing and paying VAT but on investigation were found to be involved in VAT fraud relating to ‘missing trader’ schemes "
}
] |
[
{
"from": "human",
"value": "As an individual/organization should I pay VAT and income tax as well?"
},
{
"from": "gpt",
"value": "Income tax is a compulsory tax obligation whereas, for VAT, you pay for it when you are registered with VAT."
}
] |
[
{
"from": "human",
"value": "What are the benefits of the VAT Special Table?"
},
{
"from": "gpt",
"value": "The VAT special table bears the following benefits for traders:\n1. Identify erroneously added VAT obligations or VAT obligations that are no longer required.\n2. Reduces cases of abuse of traders PIN by fraudulent persons\n3. Assist traders to conduct business with compliant suppliers"
}
] |
[
{
"from": "human",
"value": "What happens when a Taxpayer is on-boarded on the VAT Special Table?"
},
{
"from": "gpt",
"value": "1. The taxpayer on-boarded on the VAT Special Table will be restricted from filling VAT returns. Upon attempting to file the return, the system will display the message: “This PIN is currently under review for VAT compliance irregularities. Please contact nearest KRA office.”\nNote : Penalties will not be charged for non-filling of VAT returns as a result of on boarding of a taxpayer on the VAT special table.\n2. Traders cannot claim input tax from taxpayers’ on boarded on the special table. Upon upload of an original or amended VAT return that contains the PIN of a taxpayer who is in the special table, the entry will be rejected by the system and the following message displayed: “This PIN is not liable to input tax deduction”.\nThe affected taxpayers will be required to contact their Tax Service Office for guidance on removal from the VAT Special Table."
}
] |
[
{
"from": "human",
"value": "How do I calculate VAT"
},
{
"from": "gpt",
"value": "VAT operates on an Input - answer Principle. A registered person should maintain a record of his sales and purchases for a tax period.\nInput tax refers to VAT charged on purchases of taxable purchases and expenses for business purposes.\nanswer tax refers to the VAT charged on the sales of taxable goods or services.\nTax payable is the difference between the answer tax and the Input tax.\nanswer Tax - Input Tax = VAT Payable\n If positive, tax due is payable on or before the 20th of the following month."
}
] |
[
{
"from": "human",
"value": "What is exempt from Withholding Tax?"
},
{
"from": "gpt",
"value": "- Dividends received by a company resident in Kenya from a local subsidiary or associated company in which it controls (directly or indirectly) 12.5% or more of the voting power.\n- Marketing commissions and residue audit fees paid to foreign agents in respect of export of flowers, fruits and vegetables.\n- Interest payments to banks and insurance companies.\n- Payments made to tax exempt bodies.\n- Local management and professional fees whose aggregate is below Ksh 24,000 in a month.\n- Air travel commissions paid by local air operators to overseas agents."
}
] |
[
{
"from": "human",
"value": "What is Withholding Income Tax and what type of transactions does it apply to?"
},
{
"from": "gpt",
"value": "Withholding Income Tax is tax withheld at source. A person making certain payments deducts tax, at the applicable rate, and remits the tax to the Commissioner on behalf of the recipient. Examples of payments subject to withholding tax include, among others: \n- Management, professional or training fees\n- Consultancy fees, Legal fees, Audit fees\n- Contractual fees\n- Winnings\n- Appearance at or performance to entertain\n- Royalties\n- Interest and deemed interest\n- Dividends"
}
] |
[
{
"from": "human",
"value": "Can an employer choose to either pay their staff using the withholding tax or PAYE regime?"
},
{
"from": "gpt",
"value": "Employees are subject to PAYE taxes. The rates applicable are the individual tax (graduated scale) rates and the employer may take into account allowable deductions (such as mortgage interest) and reliefs (such as personal relief and insurance relief) when computing the PAYE."
}
] |
[
{
"from": "human",
"value": "What is Turnover Tax (TOT)?"
},
{
"from": "gpt",
"value": "Turnover Tax (TOT) is a tax charged on gross sales of a business as per Sec.12 (c) of the Income Tax Act. The tax is payable by resident persons whose gross turnover is more than Ksh 1,000,000 but less than Ksh 50,000,000 in any given year."
}
] |
[
{
"from": "human",
"value": "What is the effective date of TOT?"
},
{
"from": "gpt",
"value": "1st January 2020"
}
] |
[
{
"from": "human",
"value": "What is the rate of TOT and the due date for filing and paying?"
},
{
"from": "gpt",
"value": "Turnover Tax is charged at the rate of 1% on gross sales. The due date for filing and paying TOT is on the 20th day of the following month."
}
] |
[
{
"from": "human",
"value": "Does the levying of Turnover Tax and Presumptive Tax amount to double taxation?"
},
{
"from": "gpt",
"value": "No. Presumptive tax is an advance tax that shall be deducted from Turnover Tax payable in the subsequent month(s).\nHowever, Presumptive Tax was repealed(wef 25.04.2020)."
}
] |
[
{
"from": "human",
"value": "Are there any exemptions under Turnover Tax?"
},
{
"from": "gpt",
"value": "Income exempt from TOT include;\n- Persons with business income below Ksh 1,000,000 and above Ksh. 50,000,000\nEmployment income,\nRental income,\nManagement and professional services.\nAny income subject to final withholding tax"
}
] |
[
{
"from": "human",
"value": "Can a taxpayer choose not to be subject to Turnover Tax?"
},
{
"from": "gpt",
"value": "Taxpayers who are eligible for Turnover Tax may opt to be under the provisions of this tax by writing to the Commissioner of Domestic Taxes. However this is subject to approval."
}
] |
[
{
"from": "human",
"value": "Is Turnover Tax a final tax?"
},
{
"from": "gpt",
"value": "Yes. Persons who declare and pay Turnover Tax will not be required to file annual income tax returns."
}
] |
[
{
"from": "human",
"value": "What is the penalty for late filing and payment of Turnover Tax?"
},
{
"from": "gpt",
"value": "- TOT late filing payment is Kshs. 1,000 per month (wef 25.04.2020)\n- Late payment penalty is 5% of the tax due.\n- Interest on unpaid tax is 1% of the principal tax due."
}
] |
[
{
"from": "human",
"value": "What are the benefits of Turnover Tax?"
},
{
"from": "gpt",
"value": "1. Reduced expenses; Taxpayers are only required to keep a daily gross sales record, there is no requirement to invest in computers and electronic tax registers\n2. Simplified filing and payment processes including payment through mobile phones.\n3. Reduced time for filing and paying taxes.\n4. The tax rate of 1% is lower relative to other rates of tax on income.\n5. Turnover Tax is a final tax and therefore a person is not required to file the annual income tax return."
}
] |
[
{
"from": "human",
"value": "What is Capital Gains Tax?"
},
{
"from": "gpt",
"value": "Capital Gain Tax (CGT) is tax levied on gains made from the transfer of property situated in Kenya whether or not the property was acquired before 1st January 2015."
}
] |
[
{
"from": "human",
"value": "What is the rate for Capital Gains Tax?"
},
{
"from": "gpt",
"value": "The CGT rate was increased from 5% of the net gain to 15% of the net gain, effective 1st January 2023."
}
] |
[
{
"from": "human",
"value": "When is CGT payable?"
},
{
"from": "gpt",
"value": "The due date (referred to as Tax Point) for CGT is upon registration of the transfer instrument in favor of the transferee"
}
] |
[
{
"from": "human",
"value": "Is Capital gains tax final tax?"
},
{
"from": "gpt",
"value": "Yes. Capital gains tax is a final tax and is not subject to further taxation."
}
] |
[
{
"from": "human",
"value": "Who pays Capital Gains Tax?"
},
{
"from": "gpt",
"value": "Capital Gains Tax is payable by the person who has transferred property (seller). CGT is charged at the point of transfer of property. This is upon registration of the transfer instrument in favour of the transferee indicating transfer of interest in the property from the seller to the purchaser."
}
] |
[
{
"from": "human",
"value": "Is Capital Gains Tax levied on non-resident?"
},
{
"from": "gpt",
"value": "Yes. If the gain is derived from sale of property situated in Kenya then capital gains tax is payable. Unless there is double Tax Agreements guide on certain circumstances."
}
] |
[
{
"from": "human",
"value": "What are some of the exemptions and exclusions?"
},
{
"from": "gpt",
"value": "- Income that is taxed elsewhere as in the case of property dealers.\n- Issuance by a company of its own shares and debentures.\n- Transfer of property for the purpose only of securing a debt or a loan.\n- Transfer by a creditor for the purpose only of returning property used as security for a debt or a loan.\n- Transfer by a personal representative of any property to a person as beneficiary in the course of the administration of the estate of a deceased person.\n- Transfer of assets between spouses or between former spouses as part of a divorce settlement or a bona fide separation agreement;\n- Transfer of assets to immediate family or to a company where spouses or a spouse and immediate family hold 100% shareholding;\n- A gain on transfer of securities traded on any securities exchange licensed by the Capital Markets Authority\n- A private residence if the individual owner has occupied the residence continuously for the three-year period immediately prior to the transfer concerned subject to the provisos under Paragraph 36(c) of the First Schedule to the Income Tax Act, Cap 470.\n- Property (being land) transferred by an individual where the transfer value is not more than three million shillings\n- Property (being land) transferred by an individual is an agricultural property having an area of less than fifty acres where that property is situated outside a municipality, gazetted township or an area that is declared by the Minister, by notice in the Gazette, to be an urban area for the purposes of this Act\n- Property (including investment shares) which is transferred or sold for the purpose of administering the estate of a deceased person where the transfer or sale is completed within two years of the death of the deceased or within such extended time as the Commissioner may allow in writing. Where there is a court case regarding such estate, the period of transfer or sale under this paragraph shall be two years from the date of the finalization of such court case.\n- Property, including investment shares, which is transferred or sold for the purpose of transferring the title or the proceeds into a registered family trust.\n- The transfer of title of immovable property to a family trust.\nA transfer of property that is necessitated by a transaction involving the incorporation, recapitalization, acquisition, amalgamation, separation, dissolution or similar restructuring of a corporate entity, where such transfer is—\n- a legal or regulatory requirement;\n- as a result of a directive or compulsory acquisition by the government;\n- an internal restructuring within a group which does not involve transfer of property to a third party; or\n- in the public interest and approved by the Cabinet Secretary."
}
] |
[
{
"from": "human",
"value": "What is the method of computing Capital Gains Tax?"
},
{
"from": "gpt",
"value": "Transfer value less adjusted cost then tax at 15%.\nFollow this link and learn more on how to compute Capital gains tax.\nhttps://www.youtube.com/watch?v=74Kt4nyUoy4&ab_channel=KRATV%28KenyaRevenueAuthority%29"
}
] |
[
{
"from": "human",
"value": "How does one pay for Capital Gains Tax?"
},
{
"from": "gpt",
"value": "Payment should be initiated online via iTax. Login to iTax >> Payments >> Payment Registration >> Tax head (Income tax), Sub head (Capital Gains Tax)\n>> Enter the transaction details >> Submit. The modes of payment include cash, cheque or RTGS"
}
] |
[
{
"from": "human",
"value": "What is a tax Refund?"
},
{
"from": "gpt",
"value": "It is a reimbursement of excess tax paid in a given period."
}
] |
[
{
"from": "human",
"value": "Who is Eligible for Individual Income Tax Refunds?"
},
{
"from": "gpt",
"value": "Taxpayers eligible for Income Tax refunds fall under the following categories:\n- *Category1:* Life or Education Insurance policy holders. \n - Required documents: Insurance policy certificate and Tax deduction card (Form P9)\n- *Category2:* Home owners with Mortgage from the following financial institutions Banks, Insurance companies, Building Societies, National Housing Corporation. \n - Required documents: Mortgage certificate and Tax deduction card (Form P9)\n- *Category3:* Persons with Disability holding an exemption certificate. \n - Required documents: Exemption certificate and Tax deduction card (Form P9)\n- *Category4:* Taxpayers who have paid tax deducted at source (Withholding Tax) in excess of final liability \n - Required documents: Withholding Tax Certificate and Tax deduction card (Form P9) where applicable.\n- *Category5:* Taxpayers who pays tax in error. \n - Required documents: Relevant documents to prove tax was paid in error.\nSupporting documents should be uploaded in the system and any requested additional documents scanned and sent via email to the officer processing the claim\n> Note: Employees can supply relevant documents to the employer to be granted insurance relief and mortgage deduction through the payroll. It’s only those cases that have not enjoyed this direct credit through their employer that may apply for refund."
}
] |