The Kenya Revenue Authority has published the Public Notice of 14 September 2019 concerning the amendment of the Value Added Tax Act to provide for offset or refund of excess VAT credits arising out of VAT withholding. The amendments were made to resolve issues for taxpayers making predominantly zero-rated supplies that often ended up in an excess VAT credit position due to VAT withholding without the possibility of getting a refund. With the amendments, taxpayers may offset excess VAT credits resulting from VAT withholding against VAT and other taxes due, including corporation tax, PAYE, and withholding tax. Where no offsets are available, a refund may be claimed.
Offset/refund in respect of the 36 months prior to 23 July 2019 may be claimed within 12 months of 23 July 2019. For periods after 23 July 2019, offset/refund may be claimed within 24 months from the date the tax becomes due and payable. Applications for the offset/refund should be made through the iTax system.
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