Withholding VAT in Kenya
KRA appoints certain persons to be VAT withholding agents. The agents withhold VAT at 2% of the total amount payable. Thus if you sold an item at Sh. 116 (inclusive of VAT) to withholding agent, he will withhold Sh.2 thus pay Sh. 114…
Taxation of Insurance Compensation – Commissioner of Domestic Taxes Vs Sony Holdings Ltd.
Sony Holdings Ltd a property developer owns the Westgate mall which was attacked by terrorists on 21 September 2013. The mall was out of business for some years following the incident and would later receive Sh 4.4 Billion in compensatio…
Change of capital deduction rate- Commissioner of Domestic Taxes Vs Sony Holdings Ltd.
Sony Holdings Ltd completed the construction of Westgate mall in 2007. In 2016 the filed for an amended assessment for the year of income 2010 to 2015 to allow the claim Sh. 6.4 Billion Industrial Building deduction at 25% following an a…
Employee Share ownership plan- Equity bank Vs KRA
Equity bank established an employee share ownership scheme in 2005 for purposes of encouraging their employees to acquire shares in the company. In a compliance audit carried out by KRA in 2016 on PAYE remittances, it was established that…
Tax on sale of Land Ruaraka Diversified Investments Ltd Vs KRA
Ruaraka diversified investments ltd sold property to Garden city ltd and Safaricom Plc where the Garden city mall sits. The company argued that the sale of land was subject to capital gains tax and went ahead to request for a private rul…
KRA Vs Paleah Ltd- A case of tax assessment through third party information
Paleah Stores Ltd. a provisions store based in Embu had been under paying tax between the years 2008 and 2014 based on what they termed as bad professional advice. Through an investigation conducted through their bank accounts it was …
VAT on exported services- Coca Cola Central east and west Africa Vs KRA
The coca cola company and KRA were embroiled in a dispute that lasted to nearly a decade over VAT on exported services. Coca Cola Central East and west Africa Ltd. had been offering marketing promotional services to Coca Cola Export com …
VAT on Sale of commercial property- David Mwangi Ndegwa
The taxpayer bought land in Kiambu on which some commercial buildings stood. VAT of Ksh.11,200,008.00 was charged which the buyer was quite reluctant to pay, nevertheless he paid on insistence by the seller hoping to get a refund. The bone of contention in the case was how the land was viewed. The charge was based on the fact that …
VAT on internationally traded services- PANALPINA AIRFLO LIMITED VS KRA-2018
PanalPina a logistics company was contracted by its clients in the Netherlands for purposes of exporting flowers from Kenya. As any other exporter the company filed claims for Value Added Tax refunds for the months of January 2016 and …
Tax assessment through bank statement test analysis- Digital box Ltd Vs KRA
Digital box limited an electronics dealer based in Luthuli avenue Nairobi Filed income tax and VAT returns which the revenue authority considered to be under declared by over Sh. 700 Million. The company raised an objection to the commi …