Clarifications and Important Updates Regarding the VAT Prepopulated Return Implementation and Functionality

As part of its commitment to data-driven compliance, the Authority has implemented an iTax feature facilitated by KRA, enabling validation of VAT return declarations through data transmitted via the Tax Invoice Management System (TIMS/eTIMS).

READ ALSO: Implementation and Oversight of the Collection Process for the Affordable Housing Levy (AHL) by Kenya Revenue Authority (KRA)

In addition to enhancing tax compliance, the introduction of the VAT prepopulated return aims to streamline return filing processes and expedite refund processing, thereby improving the overall customer experience.

Outlined below are significant enhancements and clarifications pertaining to the VAT Prepopulated return, which was initially launched in March 2024:

1. Correction of Exempt Sales Included in Zero Rated Supplies (Sheet D1):
Some taxpayers noticed their exempt sales incorrectly listed as zero-rated due to both types of sales being transmitted with a zero rate by TIMS devices. This issue has been resolved, and affected taxpayers are urged to download the updated VAT auto-populated return for filing.

2. Implementation of the Incremental Batch Process:
The system now features an enhanced incremental batch process to update late-transmitted invoices, making them available under the respective sales and purchases sheets on the following day. This facilitates taxpayers unable to claim input tax due to delayed invoice transmission by suppliers. Once suppliers connect their devices to the internet, invoices will seamlessly transmit to KRA. Importantly, taxpayers can claim import entries as long as the status on the KRA Customs system (iCMS) is settled or removed, even if not included in the Imports CSV on sheet F.

3. Clarification Regarding Rejected Invoices under Purchases:
Certain taxpayers experienced missing purchases in the Sheet F CSV of the auto-populated return. This could be attributed to sellers categorizing sales as “sales to final consumers” despite transmitting the CU invoice number to KRA, or issues with TIMS device configuration and transmission where invoice data was sent to KRA without the buyer PIN. Engagement with respective TIMS device suppliers is necessary to resolve configuration and transmission issues to ensure the PIN is transmitted. Upon resolution, suppliers should reissue corrected invoices with buyer PINs to KRA and reverse previous invoices. Credit notes for such cases should not include the buyer PIN, as the invoice was transmitted as a sale to final consumer.

4. Clarification Regarding Zero-rated Supplies:
Some taxpayers with zero-rated supplies for both local and exports face challenges in capturing sales under Sheets D1 and D2, respectively. The system now validates zero-rated supplies against the total of sheet D1, requiring affected taxpayers to declare all zero-rated supplies under sheet D1.

READ ALSO: KRA, KICD Partner To Enhance Tax Literacy Through Technology In Competency-Based Curriculum (CBC) in Kenya

5. Mandatory Declaration of Credit Notes under Sheet F:
The system mandates all taxpayers to declare credit notes under purchases as per prefilled credit notes in sheet F. However, claiming other normal purchases as prefilled by the return is optional. As per Section 17 of the VAT Act, restrictions relating to input tax apportionment, disallowing prohibited input tax, and postponing claims to subsequent periods are permissible within a six-month timeframe.

Source: Kenya Revenue Authority (KRA)



KRA PIN REGISTRATION

Are you looking to Register and get a New KRA PIN Number? We are here and ready to assist you with Registration of KRA PIN Number. Fill and submit your request online for KRA PIN Registration.


KRA PIN RETRIEVAL

Are you looking to Retrieve and get a Lost KRA PIN Certificate? We are here and ready to assist you with Retrieval of KRA PIN Certificate. Fill and submit your request online for KRA PIN Retrieval.


KRA PIN UPDATE

Are you looking to Update an Old KRA PIN Number on iTax (KRA Portal)? We are here and ready to assist you with Update of KRA PIN Number. Fill and submit your request online for KRA PIN Update.


KRA PIN CHANGE OF EMAIL ADDRESS

Are you looking to Change the Email Address linked to KRA PIN Number on iTax? We are here and ready to assist you. Fill and submit your request online for KRA PIN Change of Email Address.


REFUGEE KRA PIN REGISTRATION

Are you looking to Register KRA PIN Number for Refugee? We are here and ready to assist you. Fill and submit your request online for Refugee KRA PIN Registration.


FOREIGNER KRA PIN REGISTRATION

Are you looking to Register KRA PIN Number for Foreigner? We are here and ready to assist you. Fill and submit your request online for Foreigner KRA PIN Registration.


SELF HELP GROUP (SHG) KRA PIN REGISTRATION

Are you looking to Register Self Help Group (SHG) KRA PIN Numberr? We are here and ready to assist you with Registration of Self Help Group (SHG) KRA PIN Number. Fill and submit your request online for Self Help Group (SHG) KRA PIN Registration.


COMPANY KRA PIN REGISTRATION

Are you looking to Register Company KRA PIN Numberr? We are here and ready to assist you with Registration of Company KRA PIN Number. Fill and submit your request online for Company KRA PIN Registration.


PARTNERSHIP KRA PIN REGISTRATION

Are you looking to Register Partnership KRA PIN Numberr? We are here and ready to assist you with Registration of Partnership KRA PIN Number. Fill and submit your request online for Partnership KRA PIN Registration.


SOCIETY KRA PIN REGISTRATION

Are you looking to Register Society KRA PIN Numberr? We are here and ready to assist you with Registration of Society KRA PIN Number. Fill and submit your request online for Society KRA PIN Registration.


ASSOCIATION KRA PIN REGISTRATION

Are you looking to Register Association KRA PIN Numberr? We are here and ready to assist you with Registration of Association KRA PIN Number. Fill and submit your request online for Association KRA PIN Registration.


NGO KRA PIN REGISTRATION

Are you looking to Register NGO KRA PIN Numberr? We are here and ready to assist you with Registration of NGO KRA PIN Number. Fill and submit your request online for NGO KRA PIN Registration.


KRA NIL RETURNS FILING

Are you looking to file KRA Nil Returns? We are here and ready to assist you with Filing of KRA Nil Returns. Fill and submit your request online for KRA Nil Returns Filing.


KRA EMPLOYMENT RETURNS FILING

Are you looking to file KRA Employment Returns? We are here and ready to assist you with Filing of KRA Employment Returns. Fill and submit your request online for KRA Employment Returns Filing.


TURNOVER TAX (TOT) RETURNS FILING

Are you looking to file Turnover Tax (TOT) Returns? We are here and ready to assist you with Filing of Turnover Tax (TOT) Returns. Fill and submit your request online for Turnover Tax (TOT) Returns Filing.


MONTHLY RENTAL INCOME (MRI) RETURNS FILING

Are you looking to file Monthly Rental Income (MRI) Returns? We are here and ready to assist you with Filing of Monthly Rental Income (MRI) Returns. Fill and submit your request online for Monthly Rental Income (MRI) Returns Filing.


PAY AS YOU EARN (PAYE) RETURNS FILING

Are you looking to file Pay As You Earn (PAYE) Returns? We are here and ready to assist you with Filing of Pay As You Earn (PAYE) Returns. Fill and submit your request online for Pay As You Earn (PAYE) Returns Filing.


VALUE ADDED TAX (VAT) RETURNS FILING

Are you looking to file Value Added Tax (VAT) Returns? We are here and ready to assist you with Filing of Value Added Tax (VAT) Returns. Fill and submit your request online for Value Added Tax (VAT) Returns Filing.