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Tax Question...
Rank: Veteran Joined: 1/3/2014 Posts: 1,063
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Much Know wrote:PeterReborn wrote:
For the above query the income taxable is business and farming income at the graduated scale rates.
Kindly, Calculated together(Combined Gross Income from both) or Seperately,( A separate graduated scale for farming and another for rental), If the former what is the lowest rate (we have been advised the highest is 20%)? Taxation in Kenya depends on whether its a corporate or individual and also whether resident or non resident. The two will be taxed separately.For both the rental and farming income you need to deduct the allowable deductions.The tax will be based on the net amounts. For rental income the resident individuals will be taxed through the graduated scale rates.If resident companies,charged at a flat rate of 30% and if non resident,a withholding tax of 30% on gross amount will be applicable. Net farming income will be added as other incomes and computed through the graduated scale rates. If there was any tax paid at the source ie withholding tax and installment tax,then that tax will be deducted from the total tax payable. Consistency is better than intensity
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Rank: Elder Joined: 7/22/2008 Posts: 2,723
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PeterReborn wrote:Much Know wrote:PeterReborn wrote:
For the above query the income taxable is business and farming income at the graduated scale rates.
Kindly, Calculated together(Combined Gross Income from both) or Seperately,( A separate graduated scale for farming and another for rental), If the former what is the lowest rate (we have been advised the highest is 20%)? Taxation in Kenya depends on whether its a corporate or individual and also whether resident or non resident. The two will be taxed separately.For both the rental and farming income you need to deduct the allowable deductions.The tax will be based on the net amounts. For rental income the resident individuals will be taxed through the graduated scale rates.If resident companies,charged at a flat rate of 30% and if non resident,a withholding tax of 30% on gross amount will be applicable. Net farming income will be added as other incomes and computed through the graduated scale rates. If there was any tax paid at the source ie withholding tax and installment tax,then that tax will be deducted from the total tax payable. Asante sana PeterReborn. Much appreciated.
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Rank: Veteran Joined: 1/3/2014 Posts: 1,063
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Kusadikika wrote:PeterReborn wrote:Much Know wrote:PeterReborn wrote:
For the above query the income taxable is business and farming income at the graduated scale rates.
Kindly, Calculated together(Combined Gross Income from both) or Seperately,( A separate graduated scale for farming and another for rental), If the former what is the lowest rate (we have been advised the highest is 20%)? Taxation in Kenya depends on whether its a corporate or individual and also whether resident or non resident. The two will be taxed separately.For both the rental and farming income you need to deduct the allowable deductions.The tax will be based on the net amounts. For rental income the resident individuals will be taxed through the graduated scale rates.If resident companies,charged at a flat rate of 30% and if non resident,a withholding tax of 30% on gross amount will be applicable. Net farming income will be added as other incomes and computed through the graduated scale rates. If there was any tax paid at the source ie withholding tax and installment tax,then that tax will be deducted from the total tax payable. Asante sana PeterReborn. Much appreciated. Karibu sana @Kusadikika. Consistency is better than intensity
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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Fpr guys working in diaspora but are resident/Nationals of Kenya,do they file KRa returns? If yes, if your country (e.g Uk) have DTA with Kenya,how do you file the returns? If Obiero did it, Who Am I?
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Rank: Member Joined: 6/17/2010 Posts: 572
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tax experts, consultants, what happens in the following scenario; setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says. should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible 'One headache for famous medieval holy people was that someone might murder you to acquire your body parts for the relics trade'
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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vky wrote:tax experts, consultants, what happens in the following scenario;
setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says.
should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible No need to register but you will have to pay ToT if your annual gross revenue is above 500k and below 5m If Obiero did it, Who Am I?
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Swenani wrote:vky wrote:tax experts, consultants, what happens in the following scenario;
setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says.
should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible No need to register but you will have to pay ToT if your annual gross revenue is above 500k and below 5m Has to remember that ToT is N/A if set up as a limited company. Life is short. Live passionately.
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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sparkly wrote:Swenani wrote:vky wrote:tax experts, consultants, what happens in the following scenario;
setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says.
should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible No need to register but you will have to pay ToT if your annual gross revenue is above 500k and below 5m Has to remember that ToT is N/A if set up as a limited company. Quote:For TOT purposes, " Business" includes
any trade, profession or vocation, and
every manufacture, adventure and
concern in the nature of trade, but does
not include:
(i) employment income
(ii) exempt incomes falling under the
I"Schedule of the Income Tax Act
_i) business incomes subject to a final
Withholding tax i.e. Bank
interest,divindents,
Incomes earned from government
bonds & treasury bills, payments made
to non-residents
(iv) Persons in receipt of business Incomes
but with annual turnover below Kshs.
500,000-
(v) limited companies
(vi) Rental Income
(vii) Professional, management fees If Obiero did it, Who Am I?
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Rank: New-farer Joined: 8/12/2016 Posts: 22
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vky wrote:tax experts, consultants, what happens in the following scenario;
setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says.
should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible Start the biashara as a limited company with only the income tax obligation. since your annual turnover is not likely to be over 5m you dont need to register for VAT and since its a ltd co no need for TOT. If you pay your self a salary note it will be liable to PAYE. Profits will be liable to tax at 30% TOT scenario- your gross revenue will be liable to tax at 3% which is a final tax. As this is taxed on revenues, you may be paying to the tax man more than you probably ought to since expense are not allowable. This is however more simplified since you pay on gross and spend the rest vile unataka. In both scenarios when your annual revenues hit 5m you will have to register for VAT.
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Rank: Member Joined: 12/17/2016 Posts: 225
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bennry wrote:vky wrote:tax experts, consultants, what happens in the following scenario;
setting up a small biz, biz will deal in goods attracting VAT, now, the VAT Act sets the amount of revenue a biz requires so as to be registered for VAT at over 5m per year, this biz will not generate enough revenue to meet the 5m threshold by VAT Act at least for two years of operation, when i asked two different KRA guys who both deal with VAT, about the above, they both said i should register without regard to what the Act says.
should i go with what the law says or should i register for VAT without meeting the set threshold, is that even possible Start the biashara as a limited company with only the income tax obligation. since your annual turnover is not likely to be over 5m you dont need to register for VAT and since its a ltd co no need for TOT. If you pay your self a salary note it will be liable to PAYE. Profits will be liable to tax at 30% TOT scenario- your gross revenue will be liable to tax at 3% which is a final tax. As this is taxed on revenues, you may be paying to the tax man more than you probably ought to since expense are not allowable. This is however more simplified since you pay on gross and spend the rest vile unataka. In both scenarios when your annual revenues hit 5m you will have to register for VAT. @Bennry, what if you dont have VAT obligation and you deliver services but the end user,lets say Company X, which is appointed on behalf of KRA as Withholding VAT agent withholds VAT and pays you less 6% ? Reflection Eternal
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