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VAT Registration Part 2

Introduction

This post is a continuation of VAT registration (1). The post will address the following four issues:

  1. VAT Registration documents
  2. The effective date of VAT registration
  3. Display of VAT registration certificate
  4. VAT Registration offences

VAT Registration Documents

For Individuals, Sole proprietorships and Partnerships (including Limited liability partnerships)

  1. PIN certificate (number) of the individuals.
  2. Any certificate of business name registration.
  3. National identification cards (number).
  4. Alien identification cards (number).
  5. Actual or expected taxable turnover of kshs 5.0 million or more for 12 months.
  6. Email address
  7. Physical location.
  8. Access to i-Tax platform.

Limited Liability Companies (private and public)

  1. PIN of the company.
  2. PIN of every director.
  3. Copy of incorporation certificate.
  4. Memorandum and Articles of Association.
  5. Actual or expected taxable turnover kshs 5.0 million or more for 12 months.
  6. Email address and physical location.
  7. Access to i-Tax platform.

Any other potential VAT taxpayer

  1. PINs (organization’s and directors).
  2. Copies of registration documents (from the registrar of companies).
  3. Other registrations (e.g. NGO board).
  4. Actual or expected taxable turnover kshs 5.0 million or more for 12 months.
  5. Email address and physical location.
  6. Access to i-Tax platform.

Commissioner’s Decisions

On receipts of the VAT registration application, the application is processed and a decision made. Commissioner’s decisions are either:

  1. Accepted – registration done.
  2. Declined – the obligation is not done:
  3. Declined in total or
  4. Extra documents required.

If the Commissioners decision is yes:

  1. Normal registration (actual) – the obligation is included in the PIN certificate.
  2. Intending trader registration (expected) – the obligation is included in the PIN certificate.
  3. Voluntary registration – the obligation is included in the PIN certificate.
  4. Compulsory registration – the obligation is included in the PIN certificate.

Qualification for Voluntary VAT Registration

Higher chances of voluntary registration:

  1. The person making or shall make taxable supplies.
  2. Fixed place of business operation.
  3. If the business is in operation:
    • Proper business records are maintained.
    • The person complies with the obligations of other revenue laws.
  4. Reasonable grounds to believe the person will maintain proper records, file regular and reliable tax returns.

Effective Tax Date of VAT Registration

  1. Normal registrations and compulsory registrations:
  2. According to application or
  3. Beginning of the first tax period after the person was required to register (application backdated).
  4. Date always specified in the certificate.
  5. Voluntary and intending registrations – date specified in the certificate.

Group Registration

  1. Note: Section 34 (9) – the CS National Treasury may provide registration for a group of companies as one registered person – because of suspected tax evasion.
  2. A group of companies can apply for one registration- to ease operations.
  3. The registration will either be compulsory by CS or voluntary by the taxpayer.

VAT Certificate Display

  1. VAT certificate is the PIN certificate with VAT obligation.
  2. Displayed in a conspicuous place all the time.
  3. Originally displayed at the principal place of business in a conspicuous place all the time.
  4. Copies displayed in any other place the person carries on business.

Changes In VAT Registration Details

Changes such as in:

  1. Name.
  2. Address (physical and email).
  3. Place of business (building or location).
  4. Nature (additions or subtractions, goods, services etc.).
  5. Must be communicated to the Commissioner within 21days.

VAT Registration Offences

    1. Failure to apply for registration as required under the VAT Act (2013).
      • Penalty kshs 100,000 for every month one remains unregistered.
    2. Application for cancellation of VAT registration when still required to be registered.
      • Fine < kshs 200,000 or
      • Jail time not exceeding 2 years
      • Or both fine and jail time.

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