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Input VAT is commonly referred to as input tax. This is the tax charged on the purchase of goods and services locally in furtherance of taxable business.

1. Introduction.
2. Types of input VAT.
   • Deductible input VAT.
   • Non-deductible input VAT.

Types of input VAT

There are two types of input VAT in Kenya:

1. Deductible input VAT.
2. Non-deductible input VAT.

Deductible Input Tax

This is input VAT that a person is allowed to deduct from output VAT. However, there are conditions for the person to be able to deduct the input VAT. The following are some of the conditions:

1. The person must be VAT registered.
2. The input VAT was incurred in furtherance of the business. The input VAT must be directly related to the business.
3. The person was issued with an original tax invoice or receipt with ETR/ESD.
4. The input VAT was incurred within 6 months.

Non-deductible Inputs VAT

There are several types of non-deductible input VAT as follows:

1. Input VAT that is not directly incurred in the furtherance of taxable business.
2. Input VAT directly incurred in the furtherance of business but it is prohibited by in the VAT Act e.g. in vehicles and restaurant and hotel entertainment.
3. Input VAT incurred more than 6 months ago.
4. Input VAT with no documentary evidence.

Note:

The Commissioner may require further evidence to allow deductibility of input VAT.

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Disclaimer

This post is for general overview and guidance and does not in any way amount to professional advice. Hence, www.taxkenya.com, its owner or associates do not take any responsibility for results of any action taken on the basis of the information in this post or for any errors or omissions. Kenyan taxpayers must always rely on the most current information from KRA. Tax industry in Kenya is very dynamic.