VAT Registration Threshold Checker Kenya 2026

When registration becomes compulsory

A business must register for VAT when it makes, or expects to make, taxable supplies above the registration threshold, which is currently KES 5,000,000 in a 12-month period. Taxable supplies include standard-rated and zero-rated sales, but not exempt sales. The test looks both backwards and forwards: you must register if your sales in the last 12 months reached the threshold, or if you reasonably expect your sales in the next 12 months to reach it.

What the checker does

You enter the taxable sales for the last 12 months and what you expect for the next 12 months. The checker compares the higher of the two with the threshold and reports whether registration is required, how much room is left and when to act. A figure exactly equal to the threshold counts as reaching it.

A worked example

With sales of KES 4,900,000 over the past year and no expected growth, the result is "not yet", with a small margin. With KES 5,000,000 of sales, it says you must register. With KES 1,000,000 of sales so far but a signed contract that you expect to take sales to KES 6,000,000 in the next year, it also says you must register, because the test looks forward.

What counts as turnover

Count the value of taxable sales excluding VAT. Include sales to everyone, for all your businesses together if one person owns them, since artificial splitting of a business to stay below the threshold is not allowed. Exclude exempt sales, the sale of capital assets and income that is not a supply, such as a loan. If you are unsure about the status of some sales, ask KRA or a tax adviser.

How and when to register

You apply on iTax, using your own login, and need a KRA PIN first. The application asks about your activities, address and expected sales. Once registered, you must charge VAT from the effective date, issue valid tax invoices, usually through eTIMS, file a VAT return every month and keep records. Late registration can lead to a penalty and an obligation to pay VAT you should have charged, even if you did not collect it from customers.

Voluntary registration

A business below the threshold may register voluntarily. The main reason is to reclaim input VAT, for example a start-up with large purchases or a business that sells mostly to VAT-registered customers who want to reclaim VAT. The downside is the paperwork and the fact that you must charge VAT to customers who cannot reclaim it, which can make you less competitive.

VAT or turnover tax?

Small businesses sometimes confuse the two taxes. Turnover tax is a small percentage of sales that replaces income tax for eligible small businesses. VAT is a consumption tax collected on behalf of KRA. A business can be liable for both if it is above the VAT threshold and uses turnover tax for its income tax. The turnover tax calculator covers the other side.

Limits

This tool checks the monetary test only. It does not decide whether your supplies are taxable or exempt, or how related businesses are treated. It gives an estimate for information only, and a tax adviser can confirm your position.

After you register

Registration brings a set of habits: issue tax invoices for every sale, keep purchase invoices that show your PIN, file the return every month even in a nil month, and pay by the 20th. Adjust your prices to account for VAT, and tell customers when you start charging. Set up your bookkeeping so that VAT is tracked in a separate account, because money collected as VAT belongs to KRA, not to the business.

Guides, tools and templates for this topic

Read next: VAT for small businesses in Kenya: when to register and what to charge, Turnover tax for small businesses in Kenya: rate, limits and when to use it, The KRA filing calendar for small businesses: every monthly and yearly deadline

Related calculators: VAT Calculator, VAT Return Calculator, Turnover Tax Calculator

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