What is VAT?
VAT is the abbreviation of Value Added Tax. VAT is in general due when goods and/or services are sold. It applies to most goods and services supplied for use or consumption in Kenya. VAT is a consumption tax because it is ultimately borne by the final consumer.
Who must pay VAT?
Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.
Where imported taxable services (including electronic services) are provided by a supplier that is non-resident in Kenya (as is the case for Zoom) the responsibility to collect and remit VAT depends on whether the Kenyan customer is registered for VAT or not.
If you are registered for VAT in Kenya, you should provide Zoom with your Personal Identification Number (PIN) and a declaration that you are registered for VAT in Kenya. If you are registered for VAT, then no VAT will be charged on the supplies made to you by Zoom; however, you may be required to self-assess for the VAT under the “reverse charge” mechanism. If you are not registered for VAT in Kenya, VAT shall be collected on the supplies made to you by Zoom.
Why am I being charged VAT?
Zoom is registered for VAT in Kenya as a non-resident supplier of electronic services. As such, Zoom is required to collect and remit VAT on supplies made to non-VAT registered customers in Kenya.
What is a Personal Identification Number (PIN)?
A Personal Identification Number (PIN) is a universal tax registration number in Kenya. It is an alphanumeric number consisting of 11 characters, the first and last of which are letters whilst the middle characters are digits. The PIN for an individual is identified where the first character is A, for example “A000123456F”, whereas the PIN for corporate business entities starts with the letter P for example "P123456789X”. Both individuals and corporations may be registered for VAT in Kenya.
How do I enter my PIN?
To provide your PIN and validate your VAT registration status, please complete the following steps:
- Sign in to the Zoom Portal.
- In the navigation panel, click Account Management, then Billing.
- Click the Billing Information tab.
- Under Sold to Contact, choose to edit the VAT/PIN number (which appears after the Sold to Contact Address field).
- Enter your PIN.
- Check the box that you are registered for VAT in Kenya and click Save.
You are required to notify us if there is a change to your VAT registration status.
Does Zoom have a PIN?
Yes, Zoom’s PIN will be shown on the invoice it issues to you.
How is Zoom determining which customers VAT applies to?
If a customer's ‘Sold To’ location is in Kenya, and the customer has not provided a valid PIN and a declaration that you are registered for VAT in Kenya, Zoom will charge Kenyan VAT on its invoices.
What happens if I have a PIN but I am not VAT registered?
If a customer in Kenya does not provide a PIN, or has a PIN but is not registered for VAT in Kenya, Zoom will charge VAT on the supplies made to you.
Is there a minimum threshold purchase amount before VAT is applied?
No, where a customer in Kenya has not provided a valid PIN or a declaration that they are registered for VAT in Kenya, Zoom will charge VAT on all supplies made to you.
Are there any special exemptions applicable for charities or other business organisations under which VAT may not be charged?
Yes, if you are a business entity in Kenya but are not registered for VAT, such as you are trading below the VAT registration threshold or are exempt from VAT in Kenya, supplies made to you may be treated as B2B under the Digital Marketplace Supplies (DMPS) regulations. If this applies to you, please contact Billing to update your tax exemption status with Zoom. Upon request by you, Zoom may refund for any VAT included on invoices issued in the thirty days prior to your billing support query, if you are a valid business customer for the purposes of the DMPS regulations.
Are there any VAT obligations for me as a customer?
If you have provided a valid PIN to Zoom and a declaration that you are registered for VAT in Kenya, no VAT will be charged on the supplies made to you. However, you may be required to report the purchase and self-assess for the VAT under the “reverse charge” mechanism in your VAT return.
There is no VAT obligation for a customer who is not registered for VAT.
What if I have a PIN and forget to enter it or forget to declare that I am registered for VAT in Kenya?
The PIN and declaration that you are registered for VAT in Kenya can be entered at any time. If entered before the next invoice, Zoom will not charge VAT on the next invoice or future invoices issued to you. If no PIN or declaration that you are registered for VAT in Kenya is entered at the time the next invoice is issued, VAT will be charged until a valid PIN and declaration that you are registered for VAT in Kenya is provided.
If a valid PIN is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Zoom may refund for any VAT included on invoices issued in the thirty days prior to a valid PIN being provided. However, VAT will not be refunded on any invoices issued outside of this thirty-day period.
Decision tree – will I be charged VAT?
Every customer is unique and so are their specific tax circumstances. The above stated information should not be considered as tax advice, but as a general overview of relevant VAT rules in Kenya. Zoom cannot provide you with tax advice for your individual situation, and therefore we strongly recommend speaking with a professional tax advisor for tailored advice.