Step 1 – Register your Company
The first step is to get in touch with KRA and register your company. The KRA usually maintain offices in almost every local government area. So, if your office is located in Nairobi, you will have to register with the Integrated Office in Nairobi.
After registration, your company will be given a Tax Identification Number (TIN). Your TIN will be used for every tax related transaction you do like VAT and WHT. It is however not to be used for your state related taxes like the ones collected by the LIRS. This should be your last direct contact.
Step 2. Hire a Consultant
At this point if Possible you should hire a tax consultant or do it by yourself, . However, the next steps guide you with what the processes will be.Step 3. incorporate your Company.
You should incorporate your company through a tax consultant and to begin commencement of the business, A company may be incorporated but yet to commence business. Incorporation simply means you have registered your company with the corporate affairs commission. Commencement means the date you started using the company you registered for business. Then open up a bank account that shows inflow and outflow of money.Step 4 Provide Audited books of Accounts.
If your company commenced business for a period of time then you will be asked by your consultant to provide an audited Financial Statement (FS) or Statement of Affairs. An FS is a document that contains the financial state and performance of your business for the period under consideration. It includes things like your Balance Sheet and Profit and loss account.Step 5 Include an estimated computation Tax payable statement.
Once the Financial Statement is prepared and signed by the representative of the company and the auditors, hand it over to your consultant. The Financial Statement for a company in operation also includes your estimated tax payable. Your estimated tax payable is the amount of tax you are telling the KRA that you are liable to pay. However, this is not usually acceptable by the authorities as they often make their own computation. But you should do yours and make it as conservative as possible.Step 6. Fill the Tax clearance forms.
Your consultant will give you several forms to fill. You will be guided as you fill the forms. However, it is important that you read through the forms as most of the information you reveal in it are confidential and so you will not want to give out something that might implicate you because it is wrong.
You will also be told to provide copies of your letter head. These copies are used for correspondences with the tax authority which will typically include your application for tax clearance certificate. You will also need to give your consultant your Certificate of Incorporation and Memorandum and Articles of Association (often called MEMAT). You will also give the tax consultant a copy of the personal tax clearance certificate of your MD or/and any Director which you will obtain from the state inland revenue service. For example, in Nairobi it is obtained from the KRA offices.
- Verification can be done online on the following links:
- a)http://www.kra.go.ke/notices/pin-checker.html and
- b)http://www.kra.go.ke/notices/tcc-checker.html for PIN and TCC respectively.
Step 7 Submit the relevant Documents.
Your tax consultant will then submit your documents with the FIRS. The role of the tax consultant is very critical as their handling of your case with the authorities usually determines if the tax officials will accept your figures and give you a certificate on time.
In a situation where the account you prepared is not acceptable to the authorities they can by law use a Best of Judgement (BOJ) decision to compute the amount of tax you should pay. This is often a drastic and unfavourable scenario for the tax payer. However it can be minimized or all together avoided.Step 8 Payment for the Certificate and be issued with the company Tax Clearance Certificate
You will be given a Tax Clearance Certificate that is signed by an Inspector of Taxes. The tax clearance certificate is usually for the 3 years preceding your application. So, you will be given a certificate reflecting the years in the following sequence for example 2010, 2009, and 2008.
The cost of a tax consultant differ for small businesses. However, the can fall between 50k to 100k depending on the peculiarity of your business.
- Tax Identification certificate;
- Proof of income;
- Business registration certificate;
- Articles and Memorandum of Association
Office Locations & Contacts
The Kenya Revenue Authority (KRA)
KRA Call Centre
Times Tower, Haile Selassie Avenue
P.O Box 30742 00100, GPO,Nairobi
Tel: +254 (020) 4999 999
Cell: +254 (0711) 099 999
Email: email@example.comMinistry of Finance
Treasury Building, Harambee Avenue,
P.O. Box 30007, Nairobi
Telephone:+254-020-2252299, 0728338111 OR 0733660606
The email address of the National Treasury office in Nairobi is firstname.lastname@example.org.
Kenya National Treasury
mobile numbers 0728338111 and 0733660606.
The Fax details are (020)318033.
Anyone who carries out a taxable transaction is eligible to register for Tax clearance certificate.
Usually the fees range from Ksh.5,000 to Ksh.1000.
The certificate is valid for 3 years
If all the document are submitted on time it takes 7 working days to process the Tax Clearance certificate.
1.Registering a Company tax Clearance should be done within the limited period of time in a given period of time;
2.An applicant must ensure that he / she is registered at the Kenya Revenue Authority and that he she has a Tax Identification Number (TIN);
3.Registration is done at at a cost charge
4.An applicant must ensure that his / her Taxpayer Identification Number (TIN) appears on all Tax invoices, and on all returns and official communications with the Authority.
5.Always be keen with the deadline for registering tax returns.
6.In cases of any changes after registration of a tax, always notify the authority in writing;
7.Whenever a taxable transaction carried out ensure that a tax invoice is issued to the person who receives the goods or services;
8.All payments are made in partnering banks;
9.Ensure that payment is made before the given period expires
1. The full name and other relevant details of the registered person / applicant;
2.Tax Identification Number (TIN);
3.Period of submission of returns;
4.Amount of taxable income;
5.Amount of tax income to be registered
Need for the Document
A Tax Clearance Certificate is a written confirmation from Revenue that a person’s tax affairs are in order at the date of issue of the Certificate. In some instances a Certificate may be issued to a customer who has tax arrears provided such arrears are covered by an installment arrangement that has been agreed with Revenue.
The requirement to produce a Tax Clearance Certificate usually arises in the context of a person seeking State money (e.g. Government contracts, grants) or obtaining licenses (e.g. excise license, road transport licence) but can also arise in other cases. Apart from situations where a person is legally required to produce a Tax Clearance Certificate, Revenue is also prepared to issue a Certificate to any customer whose tax affairs are in order.