Frequently Asked Questions
What must a Kenyan invoice include for VAT purposes?
KEBS and KRA require a VAT invoice to include: the supplier's name and PIN, the customer's name and PIN (for B2B), the date, a sequential invoice number, a description of goods or services, the taxable amount, the VAT rate (16%), the VAT amount, and the total. Failure to issue a proper VAT invoice is a KRA compliance issue.
Is an invoice a legally binding document?
An invoice is a demand for payment, not a contract on its own. However, it serves as strong evidence of an agreed transaction. Combined with a signed contract or purchase order, an unpaid invoice can be used to pursue payment through the courts.
Do freelancers in Kenya need to register for VAT?
VAT registration is mandatory once your annual taxable turnover exceeds KES 5 million. Below this threshold, registration is voluntary. Even if not VAT-registered, you must declare income and pay income tax. Self-employed individuals pay income tax at applicable personal rates.
Does a Kenyan invoice need a KRA ETR receipt?
VAT-registered businesses must use a KRA-approved Electronic Tax Register (ETR) to generate a fiscal receipt for taxable supplies. The ETR receipt and your invoice work together — the invoice details the transaction; the ETR receipt is the official tax document. Non-VAT-registered businesses issue invoices without ETR requirements.
What currency should I invoice in as a Kenyan freelancer?
For Kenyan clients, invoice in KES. For international clients, you may invoice in USD, GBP, EUR, or another agreed currency — Kenyan law does not prohibit foreign currency invoicing. However, you must declare the KES equivalent for tax purposes, and foreign payments received must be declared to CBK for foreign exchange compliance.
Is an invoice valid if sent by email in Kenya?
Yes. Under the Kenya Information and Communications Act, electronic documents including invoices are legally valid. An email invoice is sufficient for most commercial and legal purposes, including VAT input claims, provided it contains all required information. For very large transactions, a signed original copy may be requested.