Kenya: Value Added Tax (Digital Marketplace Supply) Regulations entered into force with grace period

On 9 October 2020, the Value Added Tax (VAT) (Digital Marketplace Supply) Regulations, 2020, have been published in the official gazette and entered into force with a grace period. The regulations include transitional provisions requiring suppliers to register within six months of the regulations' publication. These regulations define taxable supplies, including downloadable digital content, subscription-based media, over-the-top services, software, electronic data management, music, games, search engine services, tickets, distance teaching, and other electronic services. Tax applies to these supplies when made in Kenya, with specific provisions for business-to-business and business-to-consumer transactions. Suppliers from export countries must register for tax if they conduct business-to-consumer transactions with recipients in Kenya, either through a simplified online framework or by appointing a tax representative. The place of supply is deemed to be in Kenya if the recipient is located there, determined by payment and residence proxies. Tax must be paid by the supplier or their representative, with returns submitted monthly. Penalties apply for non-compliance.