KRA has been announcing the 2021 Digital Service Tax since January 1st, 2021 when it came into effect. The Finance Act 2020 introduced DST on income from services provided through the digital marketplace in Kenya. Moreover will be applied at 1.5 percent on the gross transaction value (exclusive of VAT).
A digital marketplace is a platform enabling direct interactions between buyers and sellers of goods. Including services through electronic means. Services and goods targeted under the taxes include e-books and movies, music, and games, tickets for live events and theatres, subscription-based media including news, magazines, and digital content.
KRA is targeting to net some 1,000 businesses and persons under the new digital taxes. The tax shall be due at the time of transfer of payment for the service to the service provider. One will be subject to DST if one provides or facilitates the provision of a service to a user who is located in Kenya.
Resident and Non – Resident:
The 2021 digital service tax shall be applied to business-to-business (B2B) transactions. Including business-to-customer (B2C) transactions within the digital marketplace environment.
To learn more on new statutory provision, read now! On The Unified Payroll Return, The New 2021 PAYE rates or Everything you need to know about new PAYE rate for 2020.
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