Owners of the goods identified for auction are allowed to take part in the auction process. It is not an offence for the owner of the goods to participate in the auction process and competitively bid to purchase his/her goods.

A digital marketplace is a platform that enables direct interaction between buyers and sellers of goods and services through electronic means.

In addition to the tax obligations that are applicable in the Kenyan Tax laws, the following tax obligations apply:

1. Digital Service Tax.
2. VAT on digital supplies.

Digital Service Tax (DST) is payable on income derived or accrued in Kenya from services offered through a digital marketplace.

1.5% of the gross transaction value:

1. a) In the case of the provision of digital services, the payment received as consideration for the services; and
2. b) In the case of a digital marketplace, the commission or fee paid to the digital marketplace provider for the use of the platform

Note: The gross transaction value is exclusive of VAT.

From 1^st January 2021.

Resident and Non – Resident:

1. Digital service providers
2. Digital market place providers, or
3. Their appointed tax representatives (in the case of non-residents digital service providers or digital marketplace providers without a permanent establishment in Kenya).

Yes. DST will be applicable for both B2B & B2C (Business to Consumer) transactions.

The return and payment with respect to DST is due on or before the 20^th day following the end of the month the digital service was offered.

• Application for registration by non-resident digital service providers without permanent establishment shall be done through an online registration form via the iTax portal; itax.kra.go.ke/KRA-Portal/
• The User guide for the simplified registration process is accessible on the KRA Website using this link; https://www.kra.go.ke/images/publications/USERGUIDE---DST-NON-RESIDENT-REGISTRATION-REVIEWED-FINAL-18.12.2020-1.pdf

• Resident digital service providers will be required to file a payment return on iTax on or before the 20^th of February 2021.

A digital service provider shall be subject to digital service tax if they provide or facilitate provision of a service to a user who is located in Kenya.

If any of the following parameters are met: -­

1. Payment proxy: Payment for the digital services is made using a credit or debit facility provided by any financial institution or company in Kenya.
2. Terminal Proxy: The user accesses the digital interface from a terminal (computer, tablet or mobile phone) located in Kenya.
3. Internet proxy: The supplies or digital services are acquired using an internet protocol address registered in Kenya or an international mobile phone country code assigned to Kenya.
4. Location proxy: The user has a business, residential or billing address in Kenya.

• downloadable digital content including downloadable mobile applications, e-books and films;
• over-the-top services including streaming television shows, films, music, podcasts and any form of digital content;
• sale of, licensing of, or any other form of monetising data collected about Kenyan users which has been generated from the users’ activities on a digital marketplace;
• provision of a digital marketplace;
• subscription-based media including news, magazines and journals;
• electronic data management including website hosting, online data warehousing, file-sharing and cloud storage services;
• electronic booking or electronic ticketing services including the online sale of tickets;
• provision of search engine and automated held desk services including supply of customised search engine services;
• online distance training through pre-recorded media or e-learning including online courses and training; and
• any other service provided through a digital marketplace.

DST is applicable to digital services, thus for goods sold on digital or social media platforms the suppliers are required to declare the income earned under the self-assessment regime provided under the relevant Tax Laws.

Yes, DST is applicable on the commission of fee charged for the use of the platforms enabling direct interaction between buyers and sellers through a digital marketplace, website, or other online applications.

DST is chargeable on digital services and platforms offering digital services. Regulation 3(2) exempts income taxed under Section 35 of the Income Tax Act.

The tax due will be paid in Kenyan currency (Kenya shillings) and deposited into the KRA account of the authorized Kenyan banks

The official documentation to be submitted during the online registration process should be in English. In case the documents are in a foreign language, they are required to be translated into certified English copies before upload.

The official documentation to be submitted during the online registration process should be in English. In case the documents are in a foreign language, they are required to be translated into certified English copies before upload.

Applicable law

1. i) Income Tax Act Cap 470 (ITA) - Sections 15(3)(b), 29,30,31, 106 and the Third and Fourth Schedule.
2. ii) Tax Procedures Act ,2015 (TPA) - Sections 47, 48 & 88, 97(b), 104(3), 108
3. iii) Legal Notice No. 36 of 2010 – The Persons with Disabilities (Income Tax Deductions and Exemptions) Order, 2010