Are exports zero-rated or exempt in Kenya?

Prior to the enactment of the Finance Act, 2021 on 1 July 2021, services exported out of Kenya were zero-rated but are now exempt for VAT purposes. In HCCOMMITA E063 of 2020 Commissioner of Domestic Taxes v.

What are examples of zero-rated supplies?

Examples of items that may be zero-rated include certain foods and beverages, exported goods, donated goods sold by charity shops, equipment for the disabled, prescription medications, water, and sewage services, books and other printed publications, and children’s clothing.

What is the difference between zero-rated items and VAT exempt items?

Exempt items are different from zero-rated supplies. In both cases VAT is not added to the selling price, but zero-rated goods or services are taxable for VAT – at 0%.

What is exempt supply?

Exempt supply is defined in section 2(47) of GST Act. (47) “Exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply.

What is exempt supplies for VAT?

By definition, exempt supplies refer to ‘supply of goods or services for consideration while conducting business in the State, where no tax is due and no Input Tax may be recovered except according to the provisions of the Decree-Law’.

What goods are VAT exempt in Kenya?

Some of the most common VAT exempt goods in Kenya include milk, eggs, meat, rice, maize, bread, beans, unprocessed vegetables, tubers, infant food formula, medicines, fertilizers, sanitary towels, pharmaceuticals just to name a few.

What is exempt VAT supplies?

Exempt supplies are listed in Schedule 9 of the VAT Act 1994 and include: most supplies of land and ‘second hand’ residential properties and residential property rental, insurance, education, health, betting, finance, postal services, professional subscriptions, sports competitions and some charity fund raising events …

What is the difference of a zero rated sale and an exempt sale?

Under Zero-rating, all VAT is removed from the zero-rated goods, activity or firm. In contrast, exemption only removes the VAT at the exempt stage, and it will actually increase, rather than reduce the total taxes paid by the exempt firm’s business or non-retail customers.

Is petrol zero rated or exempt?

A fairly wide range of basic foodstuffs together with diesel, petrol and illuminating paraffin are zero-rated as distinct from exempt.

Is petrol exempt or zero-rated?

Is rent exempt or zero-rated?

Common exempt items are insurance, Royal Mail postage services, rent (assuming no option to tax), education and vocational training supplied by recognised bodies, bank charges and interest, membership subscriptions to professional bodies, donations, salary payments, payments to HMRC, dividends and payments of loans.

What is the meaning of zero-rated VAT?

Zero-rated items are goods on which the Government charge VAT but the rate is currently set to zero. The goods covered by this classification are items such as children’s clothes and footwear, water, basic foods, books and newspapers.

What 3 items are VAT exempt?

VAT Exemption of “Essential Goods”. Does that mean more disposable income for consumers?

  1. Food. Any food product, including non -alcoholic beverages;
  2. Cleaning and hygiene products. Toilet Paper, sanitary pads, sanitary tampons, condoms;
  3. Medical.
  4. Fuel, including coal and gas.
  5. Basic goods, including airtime and electricity.

What is the meaning of zero rated VAT?

Is rent exempt or zero rated?

What is the main difference between exempt supply and zero-rated supply?

By zero rating it is meant that the entire supply chain of a particular zero-rated supply is tax-free i.e. there is no burden of tax either on the input tax side or on the output side. This is in contrast with exempted supplies, where only output is exempted from tax but tax is levied on the input side.

What are exempt expenses?

Exempt expenses – If an expense is exempt, it means that you can’t charge VAT on it. Because VAT can’t be recovered on these purchases, they mustn’t be included in your VAT records.

Is food zero rated or exempt?

Food and drink for human consumption is usually zero-rated. Standard-rated items include catering, alcoholic drinks, confectionery, crisps and savoury snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water.

What are standard and zero rated items?

Standard Rated includes all the taxable supplies with the application of VAT in each emirate. Zero-rated supplies include supplies with VAT tax rated at zero per cent. Exempt supplies include sales that are exempted from VAT tax. As Standard Rated supplies are taxable in nature, input tax can be recovered.

Is petrol exempt or zero rated?

Is milk zero rated or exempt?

All hot beverages and any drinks, including zero-rated drinks sold for consumption on your premises are standard rated. Cold drinks that are zero-rated in their own right, for example, milk and are supplied for off-premises consumption can be treated as zero-rated.

Are tea bags zero rated?

As a general rule, food in the UK isn’t subject to VAT (or it is zero rated) if it is served requiring preparation or cooking. Accordingly, as per HMRC’s guidelines, Teabags and Loose Leaf Tea to which you must add hot water is zero rated for VAT.

Is coffee zero rated or exempt?

Zero-rating therefore extends to coffee beans, instant coffee, drinking chocolate and cocoa, chicory, and dandelion root (coffee substitutes).

What are the zero rated goods and services in Kenya?

This article will give a clear insight on the list of zero rated goods and services in Kenya. Some of the most common VAT exempt goods in Kenya include milk, eggs, meat, rice, maize, bread, beans, unprocessed vegetables, tubers, infant food formula, medicines, fertilizers, sanitary towels, pharmaceuticals just to name a few.

What is the difference between zero-rated and exempt supplies?

So what is the difference between zero-rated and exempt supplies? Well, the main difference between the two is that a business can claim input tax for zero-rated goods but the same cannot be claimed for exempt goods.

How to list zero rated supplies/goods under 5th Schedule?

In VAT Act, zero rated supplies/goods are listed under Fifth Schedule. 1. Go to Gateway of Tally > Accounting Vouchers > F9: Purchase .

What is an example of a VAT exempt supply?

Plants and machinery designed specifically for garbage collection are some examples of VAT exempt vehicles. Persons who deal exclusively in exempt supplies are not liable to register for VAT or claim input tax on the supplies. 1. The following financial services are VAT exempted