Google Kenya was offering marketing and support services to Google Ireland and held to the position that these were exported services thus Zero rated services. Google Kenya further argued that Kenyan customers contract directly with Google Ireland for the products. Google Kenya
adds that the services are related to non-resident entities, and were exported according to VAT’s zero rates. KRA on their side argued that Research and Developments costs and Marketing and support services were consumed in Kenya because the audience for the advertisements were based in Kenya.
The Tribunal held that the marketing support services the Appellant provided were consumed outside Kenya by the two related non-resident entities, hence constituting exported services which are zero-rated for VAT purposes. The Tribunal relied on the destination principle under
the OECD guidelines which provides that the jurisdiction where a customer is located has the taxing rights over internationally traded services.