VAT Settings
In Kenya, Value Added Tax (VAT) is administered by the Kenya Revenue Authority (KRA) and applies to most goods and services supplied in Kenya. If your business is registered for VAT, you can configure your registration details in Zoho Procurement so that the right VAT can be applied to your transactions, including bills, purchase orders, and purchase requests.
Configure VAT in Zoho Procurement
To configure VAT in Zoho Procurement:
Click Settings in the top right corner of the page.
- Click VAT under Taxes & Compliance.
- In the VAT pane, click VAT Settings.
- Toggle Is your business registered for VAT? to Yes.
- Enter the label for your VAT Registration Number (defaults to PIN) in the VAT Registration Number Label field.
- Enter your VAT Registration Number (your KRA PIN) and click Validate PIN to authenticate it with the Kenya Revenue Authority.
- If your business involves international trade, check Enable trade with contacts outside Kenya under International Trade.
- Enter the VAT Registered On date.
- Click Save.
Your VAT details will be saved, and you can start applying VAT on your transactions.
VAT Treatments
Once VAT is configured, every vendor you add is classified using a VAT Treatment, which describes the supplier of the goods or services in the transaction. The VAT Treatment on the vendor’s record determines which VAT options are available when you create a bill, purchase order, or purchase request for that vendor.
| VAT Treatment | When to Use | Available VAT Options |
|---|---|---|
| VAT Registered | The supplier is located in Kenya and is registered for VAT. | General Rate, Reduced Rate, Zero Rate, VAT Exempt |
| Non VAT Registered | The supplier is located in Kenya but is not registered for VAT. | Out of Scope |
| Non Kenya | The supplier is located outside Kenya. | Out of Scope, General Rate, Reduced Rate, Zero Rate |
When the vendor’s VAT Treatment is Non VAT Registered, the supply is Out of Scope of VAT and no VAT rate can be applied. When the vendor’s VAT Treatment is Non Kenya, you can apply the applicable VAT rate on imports of goods or services, depending on the documentation associated with the transaction.
VAT Options in Transactions
After VAT is enabled and your vendors and items are set up, the following VAT options can appear across transactions, subject to the vendor’s VAT Treatment described above:
- General Rate: 16%
- Reduced Rate: 8%
- Zero Rate: 0%
- VAT Exempt
- Out of Scope