A nil return is a tax return that reports no income or no tax due. It sounds pointless, but it is a legal requirement for many taxpayers, and not filing it leads to penalties that can be bigger than any tax you would have paid.

Why a nil return exists

KRA registers taxpayers for specific obligations, such as income tax, VAT or PAYE. Each obligation expects a return by its due date, and the system cannot tell the difference between a taxpayer who had nothing to report and one who simply forgot. A nil return tells KRA there was no income or no sales in the period, which closes the obligation for that period.

Who should file one

  • An individual with a PIN and no taxable income for the year still has an income tax return due by 30 June, unless the obligation has been removed from their account.
  • A VAT-registered business with no sales or purchases in a month must file a nil VAT return by the 20th of the following month.
  • A business on turnover tax with no sales in a month files a nil turnover tax return.
  • An employer with no employees on payroll in a month may need to file a nil PAYE return.
  • A landlord with no rent received in a month files a nil rental income return if registered for it.

If you do not have an obligation any longer, for example because you closed the business, it is better to ask KRA to deregister the obligation than to keep filing nil returns.

What happens if you do not file

A late return attracts a penalty even if no tax is due. For an individual's income tax return the penalty is the higher of a percentage of the tax and a fixed minimum, so with no tax due the minimum applies: for example a nil return filed one day late is penalised at – on the settings used by our calculator. Penalties for other taxes are different, so check the penalty calculator. They accumulate on your iTax ledger, and they can block a tax compliance certificate and other services.

How to file one

  1. Log in to iTax yourself, using your own PIN and password.
  2. Go to the returns menu and choose the return for the tax type and period.
  3. Select the nil return option, or enter zero in each field if the form requires it.
  4. Submit and download the acknowledgement receipt.
  5. Keep a copy of the receipt with your records.

If you are unsure which form to use, KRA's help pages and support channels can guide you.

Common mistakes

  • Assuming that employment income covered by PAYE means no return is needed. The annual return is still due, though it is simple.
  • Filing a nil return when there was income. This is an error that can lead to penalties for understatement. If you earned anything in the period, report it.
  • Missing a month. Monthly returns need to be filed each month, even if you filed the previous ones.

Check your obligations

Log in once a year and look at the list of obligations on your account. If you have obligations that no longer apply, ask KRA to remove them. If you are missing an obligation that does apply, add it before the first return is due.

This guide is general information, not tax advice. KRA's current rules and your own situation decide what you must file.