Legal Alert | The Value Added Tax (Digital Marketplace Supply) Regulations

The Finance Act, 2019 amended the Value Added Tax Act, 2013 (the VAT Act) by introducing a new provision stating that supplies made through a digital marketplace would be subject to Value Added Tax (VAT) in accordance with the provisions of the VAT Act. The term “digital marketplace” is defined in the VAT Act as “a platform that enables the direct interaction between buyers and sellers of goods and services through electronic means.” The Finance Act, 2019 also amended the VAT Act to grant powers to the Cabinet Secretary for National Treasury and Planning to make regulations to provide for the mechanisms of implementing VAT on taxable supplies made through a digital marketplace.

The Value Added Tax (Digital Marketplace Supply) Regulations, 2020 have now been gazetted through Legal Notice No. 190 of 2020 dated 25 September 2020. The Regulations generally provide the mechanisms for accounting for VAT on taxable supplies made in Kenya through a digital marketplace by foreign suppliers. Specifically, the Regulations provide an enhanced scope of digital services that are subject to VAT in Kenya, the requirements and the process for VAT registration for non-resident providers of digital services, the appointment of local tax representatives and the rules for the accounting and payment of VAT. The Regulations also require that non-resident providers of digital services register for VAT in Kenya within 6 months from the date of publication of the Regulations, through a simplified tax registration framework.

We have set out, in detail, the features of the Regulations in a Legal Alert which can be read here.

Should you have any questions regarding the information in this legal alert or any other tax matters, please do not hesitate to contact Daniel Ngumy or Kenneth Njuguna.

Daniel Ngumy
ALN Kenya | Anjarwalla & Khanna
Kenneth Njuguna
ALN Kenya | Anjarwalla & Khanna


The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.


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