VAT MODULE 1 (b) Interpretation of VAT Terms

VAT MODULE 1 (b) Interpretation of VAT Terms
©Dr. Wakaguyu wa-Kiburi ( 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Prepared for www.taxkenya.com by Dr. Wakaguyu wa-Kiburi
Title Value Added Tax Act (2013) 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Important? Why? Proper application of VAT law. Tax assessments are based on interpretations. Enables in-depth understanding of VAT law. Tax liability by extension. Determine tax exposure. ???? 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Important? cont’ In the words of R. J. in Cape Brandy Syndicate V Inland Revenue (1921) K.B. 64 …. In a taxing Act one has to look merely at what is clearly said. There is no reason for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Important cont’ Nothing is to be implied. One can only look fairly on the language used. And… Tax laws cannot be applied arbitrarily. Tax laws are not applied retrospectively. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Official Aid Funded Projects
Projects funded by means of: Grants or Concessional loans. This is in accordance with agreements between the Kenyan Government and a foreign: Government. Agency (not aid). 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Official Aid Funded Projects cont’
Institution. Foundation. Organization. Aid agency. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Output Tax Tax that is due on taxable supplies. Q - Is there output tax if there are no taxable supplies? 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Person Broad definition. Includes: Individual. Company. Partnership. Association of persons. Trust. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Person cont’ Estate. National government. County government. A foreign government. Political subdivision of the government or foreign government. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Registered Person Persons registered under Section 34 of the VAT Act but does not include: EPZs enterprises. SEZs. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Regulations Any subsidiary legislations made under the VAT Act. Can be made by the CS with input from the Commissioner. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Service Anything supplied by a person that is not a: Good or Money. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Services Exported out of Kenya
A service provided for: Use outside Kenya or Consumption outside Kenya. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Ship Stores Goods for use in: Aircraft in international transport and Vessels in international transport. The goods are for: a) Consumption by: Passengers. Crew. b) Sale on board. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Supply Supply of goods. Local services. Imported services. Supply of services. Local services, 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Supply of Goods A sale. An exchange or Other transfer of the right to dispose of goods as owner. Provision of electrical or thermal energy, gas and water. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Supply of Services Anything done that is not a supply of goods or money and includes: Performance of a service for another person. Grant, assignment or surrender a right of any person. Making available any facility or advantage. Toleration of any situation or refraining from doing any act. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Supply of Imported Services
Supply by a person who is not registered in Kenya to a person who is registered. Should be a taxable supply if it had been made in Kenya. The registered person should not be entitled to a credit for the full amount of input tax payable. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Tax Computerized Systems
Software or hardware for: Storing information relating to tax. Retrieving information relating to tax. Processing information relating to tax. Disseminating information relating to tax. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Tax Period One calendar month or such other period as prescribed in the regulations. From the beginning of the month to the end of the month. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

VAT Registration Certificate
A Certificate issued by the Commissioner. Currently, VAT obligation is included in the PIN certificate. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Taxable Supply A supply other than an exempt supply made in Kenya by a person: In the course or furtherance of a business carried on by the person. In connection with commencement of a business. In connection with termination of a business. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Vehicle Every description of conveyance for transport by land of : Human beings or Goods. Vehicles that carry animals such as horses? 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Goods Tariffs Goods under VAT are classified according to the tariffs in Annex 1 to the Protocol on the Establishment of the East African Community Customs Union. Interpretation follows the general rules in the Protocol. 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Zero Rated Supply Supplies listed in 2nd Schedule of the VAT Act. Supplies declared by the Cabinet Secretary as such but not yet incorporated in the VAT Act – normally put in the Kenya Gazette. Supplies are taxed at Zero percent (0%). 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

Q & A 10/15/2019 Prepared for by Dr. Wakaguyu wa-Kiburi

VAT MODULE 1 (b) Interpretation of VAT Terms

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VAT MODULE 1 (b) Interpretation of VAT Terms

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