How to File VAT Returns on iTax Portal

This is a complete guide on how to file VAT returns in Kenya. These returns are filed by individuals and companies that have a VAT obligation. The filing is done every month before or on the twentieth day of the month.

What Is Value Added Tax?

Value Added Tax is charged on the supply of taxable goods or services made or provided in Kenya and on the importation of taxable goods or services into Kenya. The VAT rate is currently 16%.

Who Should Pay VAT?

If you are registered for VAT you will be required to account for VAT charged on your taxable supplies through online monthly returns and pay any VAT due.

This is achieved by the use of the KRA’s iTax portal.

It Is Important to Note That Tax Is Due and Payable When;

• When goods or services are supplied to the purchaser.
• An invoice is issued in respect of the supply.
• Payment is received for all or part of the supply.
• A certificate is issued by an architect, surveyor or any person acting as a consultant or in a supervisory capacity in respect of the service (whichever is earliest).

What Is the Penalty for Late Filing and Paying?

The deadline for filing is on the 20th of the following month. You can file VAT returns between the first and twentieth of every month.

Penalty on late filing: Whichever is higher between, Kshs. 10,000 and 5% of the tax due and an additional surcharge of 2% compounded per month or part thereof such unpaid tax.

Penalty on late payment: 5% of the tax due and a late payment interest of 1% per month on the unpaid tax until the tax is paid in full.

How to File VAT Returns

1. Log into the KRA iTax portal using your pin and password. If you have a problem logging in, you can learn how to reset your KRA pin password.
2. Go to the returns menu and click on file returns.
3. Select VAT as the tax obligation.
4. Download the Excel Vat return form. You can use either of the first two options provided. These will require you to have Microsoft Office Excel 2010 or higher version installed on your computer. The ODS is for the Open System which rarely works.
5. Go to your downloads folder and open the zipped Vat file. Open the Excel file. Accept the security notice. At the top where it is written ‘protected view’, click to open the file. Click on edit anyway to open the Excel file.
6. Enable the macros at the top to access the file.

Step by Step Guide on How to File VAT Returns

Once your Vat monthly returns excel file opens, you will note that there are several worksheets. They are alphabetically labelled and with an added name. In most cases, you will only operate on four worksheets, Basic Info, General Rated Sales, General Rated Purchases and VAT Due.

To navigate, you can click on the arrow buttons in the bottom left-hand corner. Or you can simply click on the worksheet name and it will open.

A – Basic Info Worksheet

Fill in your KRA Pin, and select the original return type unless you are filing an amended one. The entity type is usually the head office. Enter the return period from and to. Well, this is the beginning and end of the month. Note we file for the previous month. Click next to continue.

B – General Rated Sales Worksheet

This is for recording the sales you have made. If your clients have pins, record them using the provided format and input each at a time. Use the add rows option to add more clients. You can also create a CVS file and use the import CVS option.

The other option is when you have no PINs for the clients. Indicate the total amount of taxable sale on where it is written “Total sales and Vat to customers not registered to Vat”. Then jump to sheet F but if you have zero-rated sales, record them on worksheet D.

F – General Rated Purchases

This is in case you have made some taxable purchases. The type of purchase is either local or imported. You have to enter the details of each supplier individually. Remember once you enter the taxable amount, the Vat is calculated automatically. Remember to add rows if you want to add more records.

O – VAT Due

This section is the last one. It displays the amount of Vat to be paid at the bottom. If you had credit brought forward from the previous month, there is a provision for the same. Also, note there is an entry for withholding Vat credit. Once you are satisfied that everything is okay, click validate. A zipped file is created and stored on your computer.

How to File VAT Returns -Uploading the Zip File

Go to the browser, select the returns option and click on file return. Select VAT obligation and click next. The return period is filled automatically. Click on browse and locate your zipped file on your computer. In most cases, it is stored in the ‘My documents folder’.

Select the zip file and agree on the terms before submitting it. If your VAT amount was a credit, there is no further action required. However, if there is a VAT to be paid, it is advisable to make the payment there and then.

Generating a VAT Payment Slip

There are two ways you can generate a VAT payment slip. Immediately after your return is submitted, click on the link provided to make a payment. The liability details are displayed. Click on the add button, select the mode of payment and submit. Download the payment slip using the provided link.

For the other method, click on the payment tab and select payment registration. Click next to continue. Choose the tax head which should be VAT, tax subhead the same and payment type self-assessment. Select the liability and click on the add button. Select the mode of payment and submit. Download the payment slip. The payment can be made in any of the major banks or using Mpesa.

Checking VAT Credit

1. Click on returns and select view filed returns.
2. Click on consult. A list of all the returns you have filed is displayed.
3. Click on view next to the last month you filled.
4. Scroll at the bottom to see your VAT credit.

How to Check Withholding Credit

1. Click on the certificates link.
2. Then click on the reprint VAT withholding certificate.
3. Enter the month and year then click on consult.
4. Click on the certificate number to download.

Thank you for taking the time to go through this tutorial on how to file VAT returns. Please feel free to share and like this article. You can also add your comment below.