Foreigner (Non-Resident) KRA Tax PIN Registration in Kenya

Kenya is a leading country in the East Africa region, with a GDP estimate of about $250 billion at the end of 2021, the country boasts of many things that place it on the global map, from wildlife- The only country with a National Park at its Capital, to its dominance at the world athletics, to being the country where mobile money (Mpesa) penetrated. Kenya is a prime investment country with a skilled labour force, where foreign investors can set up companies to tap the potential she has. A KRA tax PIn is required, therefore you have to do registration with KRA to obtain a Non-Resident taxpayer PIN number.

 As a foreigner, you can start a business in Kenya in any leading industry; agriculture, manufacturing, healthcare, hospitality, finance, etc. Starting a business as a foreigner has now been simplified with the unification of government services through the ecitizen platform which is a one-stop online for most government services.

One of the requirements to get started as a foreigner whether it’s for business or personal transactions within Kenya is to get registered with the taxman for taxation purposes. Once registered for KRA PIN and a Non-Resident with the Kenya Revenue Authority, one is issued with a KRA PIN Number which is a unique number. In this article, we are going to dig deeper into how to get a KRA Pin Certificate as a foreigner or Non-Resident Person.

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Why you require a KRA PIN as a Foreigner

It is common across all jurisdictions across the globe that governments raise money through taxation. This has been there since time immemorial, in the holy book-The Bible, Jesus was once asked about taxation and the response was “Render therefore to Caesar the things that are Caesar’s…” In fact, there are only two things that are certain in life –Death and Taxes- even after one hundred years people will still be paying taxes and .. let me leave out the other one since it’s not good news but it’s the reality.

Taxation in Kenya is anchored on Laws with the Constitution being the supreme law, the Income Tax Act is the primary Law guiding Taxation in Kenya and the Tax Procedures Act, other Acts are specific to a particular Tax e.g. the VAT Act.

As a non-resident, you may be in Kenya for several reasons:

1. As a Tourist-Recreational.
2. To Work-Employment.
3. To Start a Business – Investor.
4. For Studies- Foreign Students.
5. Volunteers for missions
6. Refugees

As a foreigner you may want to transact some transactions, the law bars foreigners without a work permit from engaging in business.

Another Key requirement is having a Tax Pin which is needed when you want to purchase property in Kenya, open a Bank Account, Buy a Car etc. 

The Tax Procedures Act lists the transactions that make having KRA Pin a must. The First Schedule lists Transactions which will require a KRA PIN. This includes:

1. Registration of Titles and Stamping of instruments
2. Approval of development plans and payment of water deposits.
3. Registration of motor vehicles, transfer of motor vehicles, and licensing of motor vehicles.
4. Registration of business names.
5. Registration of companies.
6. Underwriting of insurance policies.
7. Trade licensing.
8. Importation of goods and customs clearing and forwarding.
9. Payment of deposits for power connections.
10. All contracts for the supply of goods and services to Government Ministries and public bodies.
11. Opening accounts with financial institutions and investment banks.

KRA PIN Registration Requirements for a Non-Resident

To register for KRA PIN as a Non-Resident Person the following will be required.

1. A Physical Address
2. A Mobile Contact and Email Address
3. Passport Number
4. A Work Permit from the immigration department
5. An endorsement letter from Kenya Invest
6. A KRA Authorized Tax Agent
7. A refugee card.
8. Other relevant documents that KRA may request

Not all the items listed above are mandatory, they vary depending on the application. For instance, a refugee will not be requested to present a work permit.

KRA PIN Application Process

KRA PIN applications are done online from the itax portal. Before you visit and start the registration process it is advised you make sure you have all the required documents, otherwise, your application will be rejected.

Processing of non-resident KRA PIN Registration applications is not automatically processed as is the case for resident Kenyans, before they are approved KRA has to review the application to confirm all required documents have been submitted. The review process takes time as per the KRA service charter guideline.

Until an application is reviewed, you cannot make another application using the same passport number, therefore if you notice you made a KRA Pin application without submitting all the required documents you will have to wait for KRA to reject the application for you to a fresh one.

However, you can avoid all these hustles and bustles by engaging an authorized KRA tax agent to help you in the process of registering a KRA PIN for a non-resident. You will definitely require one to have your KRA PIN registration process and have it approved.

We have Authorized KRA Tax agents who can help you in the process of PIN Registration

Contact us to get the service and have your KRA PIN Application Approved ASAP!

Taxation of Non-Resident Persons

Taxes can be categorized into two, direct taxes and indirect taxes. Direct taxes are those that have a direct impact on the taxpayer and the tax liability cannot be passed on to a third party, e.g. PAYE on employment income tax. On the other hand, indirect taxes can be passed on to a third party e.g. VAT tax.

The income of non-resident taxpayers registered in Kenya with KRA is subject to withholding tax, whose rates are as follows;

Description	Non-Resident
Artists and entertainers	–
Management fees	20%
Professional fees	20%
Training fees (inclusive of incidental costs)	20%
Winnings from betting and gaming (w.e.f. 1 Jan 2014)	20%
Royalties	20%
Dividends (nil for resident shareholders with>12.5%)	10%
Equipment (movable) Leasing	5%
Interest (Bank)	15%
Interest (Housing Bond ? HBI)	15%
Interest on two-year government bearer bonds	15%
Other bearer bonds interest	25%
Rent of buildings (immovable)	30%
Rent of others (except aircraft)	15%
Pensions/provident schemes (withdrawal)	5%
Insurance Commissions	20%
Consultancy and agency(from 1 July 2003)	20%
Contractual and agency (from 1 July 2003)	20%
Telecommunication services/Message transmission	5%
Natural Resource Income (w.e.f. 01/01/2015)	20%

Other taxes apply such as employment income tax (PAYE) as per the graduated tax band rates. However, Non-residents don’t enjoy personal relief on PAYE, VAT tax on the supply of vatable goods and services, Capital Gain Tax on disposal of property, Stamp Duty on Transfer and Lease Agreements etc. For a comprehensive advisory on these taxes contact us Today

Tax Filing for Non-Resident Persons

The Kenyan Tax Regime is based on self-assessment. This means that every taxpayer is required to self asses themselves on all the taxable income they earn in a year.

Non-Residents registered taxpayers are required to do the self-assessment at the end of every year and file the tax return by the 31^st of June. As a Non-Resident person registered with a KRA Pin, you are required to file the tax returns even if you did not have income during the year, in such a case a nil return should be done

Penalty for not filing Tax Return as a Non-Resident Taxpayer in Kenya

There are penalties that are outlined by the Tax Laws. Failure to file tax returns on time attracts a Penalty.

The Tax Procedures Act S 83 states: “A person who submits a tax return after the due date shall be liable to a penalty-

• Of 25% of the tax due or Ksh 10,000 whichever is higher, if it relates to a return on account for employment income.

• Ksh 5,000 if it relates to a return that is required to be submitted under Turnover Tax, or

In any other case-

• 5% of the amount of tax payable under the return, or

• Ksh 20,000 Whichever is higher.

Tax Payment for Non-Resident Persons

After doing an assessment, the Tax payable should be paid to the Taxman. To make a tax payment, a payment registration has to be done on the itax portal to get a unique payment reference number (PRN).  With the PRM payment can be made from any of the partner banks with KRA using cash deposit or electric means such as RTGS. Once payment has been made, the itax portal will update as payment has been received

Double Tax Agreements (Tax Credit)

A Non-Resident Taxpayer who pays tax in Kenya can claim the Tax as a credit in their Jurisdiction where there exists a Double Tax Agreement between their country and Kenya

Conclusion

As a foreigner, Kenya is one of the most promising countries in Africa in terms of development and ease of doing business. You can invest and start different types of businesses which will grow and give a return on the investments.

As the business grows it is fair that you contribute a share of the income to the government for the provision of government service and equitable distribution of resources across the country. To facilitate this, you must be registered as a taxpayer.

Foreigners can only be registered as Non-Resident taxpayers if they meet the requirements set by the different laws and provisions. For instance, you will require a Tax Agent to get the PIN registered. We have authorized KRA tax agents that can help with the Non-Resident KRA PIN registration, Tax Amendments, Tax filing and tax payments. Contact us for more services. Email info@anzianoconsultants.com Tell: +254706600875