Global internet giants, including Google, Zoom, and QuickBooks, will add a 16% value-added tax (VAT) on their Kenyan service prices on February 1, 2023. The Value Added Tax (Digital Marketplace Supply) (Amendment) Regulations of 2022, which mandated that businesses charge the tax to their Kenyan clients, are to blame for this development. Google will also request tax information from its clients to abide by regional legislation.
Various organizations have already started informing their customers in a statement that beginning on February 1, 2023, they will have to charge 16% tax on all taxable products and services in Kenya due to new tax regulations. For Google, for example, Customers must enter into their Google Admin Console, click on the menu in the upper left corner, and then choose billing and payment accounts to change their tax information with Google.
To prevent any problems with the validity of their invoices, clients should update their tax information as soon as feasible. Google suggested submitting your PIN as soon as possible to guarantee that it is included in the invoice. Failure to provide your PIN before February 1, 2023, might affect the validity of your invoice and have ramifications for your ability to collect VAT charges if you are eligible.
Other international businesses have also let their clients know about the impending VAT levy, including Netflix, Spotify, and numerous e-book and video-conferencing providers. To exclude certain services offered online or via a digital marketplace from Reverse VAT, the Value Added Tax (Digital Marketplace Supply) (Amendment) Regulations of 2022 modified the VAT Act and changed the definition of a digital marketplace.
Additionally, it exempted those who provide digital services imported in this way from the KES 5 million VAT registration requirement.