KRA PIN (Personal Identification Number)
· A Personal Identification Number (PIN) is a number given by the Kenya Revenue Authority (KRA), which identifies a taxpayer for purposes of paying taxes and carrying out any transactions with KRA, as well as other Government agencies and service providers.
· The PIN is issued to both individuals and artificial persons (i.e. company, Trust, Society, Non-Governmental Organization, etc.).
· A sole proprietorship is not considered a separate legal entity and will use the proprietor’s individual PIN for all transactions.
Transactions, for which a KRA PIN is required, other than for tax purposes, include:
· Carrying out any land transaction
· Approval of development plans and payment of water deposits.
· Registration, transfer and licensing of motor vehicles.
· Registration of companies, business names or partnerships.
· Trade licensing (business license).
· Underwriting of insurance policies.
· Payment of deposits for power connections.
· All contracts for the supply of goods and services to Government Ministries and public bodies.
· Opening accounts with financial institutions and investment banks.
· Importation of goods and customs clearing and forwarding.
· Registration and renewal of membership by professional bodies and other licensing agencies.
· Registration of mobile cellular pay bill and till numbers by telecommunication operators.
· Application for Higher Education Loans Board (HELB) loans.
· Registering for a driving course.
How to register for a KRA PIN
Check here how to register a KRA PIN
Tax Obligations under the KRA PIN
A tax obligation is a duty to account and pay applicable taxes. Tax obligations that are applicable under tax PINs in Kenya include:
· Income Tax Resident Individual
Income Tax is a direct tax on income and is charged for each year of income on all the income of a person, that is accrued in or was derived from Kenya.
This is a compulsory obligation for all resident individuals registering for a PIN.
· Income Tax Non-Resident Individual
· Income Tax Company
· Value Added Tax (VAT)
Value Added Tax is charged on:
Supply of taxable goods or services made or provided in Kenya, and;
· A Personal Identification Number (PIN) is a number given by the Kenya Revenue Authority (KRA), which identifies a taxpayer for purposes of paying taxes and carrying out any transactions with KRA, as well as other Government agencies and service providers.
· The PIN is issued to both individuals and artificial persons (i.e. company, Trust, Society, Non-Governmental Organization, etc.).
· A sole proprietorship is not considered a separate legal entity and will use the proprietor’s individual PIN for all transactions.
Transactions, for which a KRA PIN is required, other than for tax purposes, include:
· Carrying out any land transaction
· Approval of development plans and payment of water deposits.
· Registration, transfer and licensing of motor vehicles.
· Registration of companies, business names or partnerships.
· Trade licensing (business license).
· Underwriting of insurance policies.
· Payment of deposits for power connections.
· All contracts for the supply of goods and services to Government Ministries and public bodies.
· Opening accounts with financial institutions and investment banks.
· Importation of goods and customs clearing and forwarding.
· Registration and renewal of membership by professional bodies and other licensing agencies.
· Registration of mobile cellular pay bill and till numbers by telecommunication operators.
· Application for Higher Education Loans Board (HELB) loans.
· Registering for a driving course.
How to register for a KRA PIN
Check here how to register a KRA PIN
Tax Obligations under the KRA PIN
A tax obligation is a duty to account and pay applicable taxes. Tax obligations that are applicable under tax PINs in Kenya include:
· Income Tax Resident Individual
Income Tax is a direct tax on income and is charged for each year of income on all the income of a person, that is accrued in or was derived from Kenya.
This is a compulsory obligation for all resident individuals registering for a PIN.
· Income Tax Non-Resident Individual
· Income Tax Company
· Value Added Tax (VAT)
Value Added Tax is charged on:
Supply of taxable goods or services made or provided in Kenya, and;
Importation of taxable goods or services into Kenya.
If you supply or expect to supply taxable goods and taxable services with a value of Kshs 5 Million or more in a year, you qualify to register for VAT.
The Law also provides for voluntary registration for persons who have made taxable sales less than the prescribed 5 million thresholds for the purposes of trade.
· Turnover Tax
· Pay as You Earn (PAYE)
PAYE is a method of collecting tax at source from individuals in gainful employment, including workers of Religious Organizations and foreign missions working in Kenya.
Gains or Profits include; wages, causal wages, salary, leave pay, sick pay, payment in lieu of leave, fees, commission, bonus, gratuity, or subsistence, travelling, entertainment or other allowance received in respect of employment or services rendered.
If you are an employer, you are required to register for this obligation.
As an employer you are required to deduct PAYE from your employees?
· Excise Tax
· Withholding Tax
· Capital Gains Tax
· Turnover Tax
· Advance Tax
A tax obligation is voluntarily assigned either by the individual or by business. Therefore, caution should be taken by taxpayers to ensure that they do not assign themselves tax obligations outside their scope of operation.
In a few cases, the law permits the Commissioner to mandatorily register a taxpayer for certain tax obligations.
If you supply or expect to supply taxable goods and taxable services with a value of Kshs 5 Million or more in a year, you qualify to register for VAT.
The Law also provides for voluntary registration for persons who have made taxable sales less than the prescribed 5 million thresholds for the purposes of trade.
· Turnover Tax
· Pay as You Earn (PAYE)
PAYE is a method of collecting tax at source from individuals in gainful employment, including workers of Religious Organizations and foreign missions working in Kenya.
Gains or Profits include; wages, causal wages, salary, leave pay, sick pay, payment in lieu of leave, fees, commission, bonus, gratuity, or subsistence, travelling, entertainment or other allowance received in respect of employment or services rendered.
If you are an employer, you are required to register for this obligation.
As an employer you are required to deduct PAYE from your employees?
· Excise Tax
· Withholding Tax
· Capital Gains Tax
· Turnover Tax
· Advance Tax
A tax obligation is voluntarily assigned either by the individual or by business. Therefore, caution should be taken by taxpayers to ensure that they do not assign themselves tax obligations outside their scope of operation.
In a few cases, the law permits the Commissioner to mandatorily register a taxpayer for certain tax obligations.
Check here how to look for tax obligation on your KRA PIN
Requirement to file tax returns
Requirement to file tax returns
Check here how to file rental income tax for landlords.
KRA PIN Cancellation or Tax Obligation Cancellation
· A taxpayer may apply for cancellation (deregistration or removal) of tax obligation for valid reasons.
· The taxpayer will be required to visit their Tax Service Office or the nearest KRA Office and provide documents supporting the application for cancellation or de-registration.
· Taxpayers are required to continue filing returns and paying taxes until they receive official communication that the KRA PIN/Tax Obligation has been cancelled.
Suspension of KRA PIN
· Suspension of KRA PIN is the temporary stoppage of PIN usage by KRA in order to compel the taxpayer to adhere to the obligations under their tax PIN.
· The taxpayer should visit their Tax Service Office or the nearest KRA Office on guidance of the required action to enable activation of the suspended PIN.
KRA PIN Cancellation or Tax Obligation Cancellation
· A taxpayer may apply for cancellation (deregistration or removal) of tax obligation for valid reasons.
· The taxpayer will be required to visit their Tax Service Office or the nearest KRA Office and provide documents supporting the application for cancellation or de-registration.
· Taxpayers are required to continue filing returns and paying taxes until they receive official communication that the KRA PIN/Tax Obligation has been cancelled.
Suspension of KRA PIN
· Suspension of KRA PIN is the temporary stoppage of PIN usage by KRA in order to compel the taxpayer to adhere to the obligations under their tax PIN.
· The taxpayer should visit their Tax Service Office or the nearest KRA Office on guidance of the required action to enable activation of the suspended PIN.
