What is Tax Compliance certificate?

In Summary

A tax compliance, otherwise known as a Tax Clearance Certificate (TCC) is an official document issued by Kenya Revenue Authority (KRA), as proof of having filed and paid all your taxes

COMPLIANCE: Kenyan taxpayers queue outside Times Tower last February to access KRA's offices. Photo/DAVID NDOLO
COMPLIANCE: Kenyan taxpayers queue outside Times Tower last February to access KRA's offices. Photo/DAVID NDOLO

A tax compliance, otherwise known as a Tax Clearance Certificate (TCC) is an official document issued by Kenya Revenue Authority (KRA), as proof of having filed and paid all your taxes.

Tax Compliance Certificates are used for accessing the following government services:

  1. Taxpayers seeking tenders with Government Ministries and Institutions.
  2. E employees leaving service (retirees) and those seeking new job opportunities.
  3. Taxpayers seeking liquor Licenses.
  4. Taxpayers seeking to work as Clearing and Forwarding Agents.

 Tax Compliance Validity

Tax Compliance Certificates (TCC) is valid for twelve months and new application must be made for annual renewal.. Application for TCC should be lodged 7 days prior to expiry of the previous one. It is important to note that KRA issues the certificate based on the information on its database and it reserves the right to withdraw the certificate based on new information received on the taxpayer. Application for a TCC isdone through iTax platform and the certificate is sent to applicants' email address.

Applying for a Compliance Certificate

Taxpayers seeking Tax Compliance Certificate must be compliant in:

  • Filing of tax returns on or before the due date for all applicable tax obligations.
  • Payment of tax on or before the due date.
  • Clearance of all outstanding tax debt.

Income Tax

Income tax is a direct tax that is imposed on income derived from Business, Employment, Rent, Dividends, Interests, Pensions among others.

 Methods of collecting Income Tax include:

  • Pay As You Earn (PAYE)
  • Withholding Tax
  • Installment Tax
  • Advance Tax
  • Presumptive Tax

 Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.

Taxation for Non- Resident’s Employment Income

Any amount paid to Non-Resident individuals in respect of any employment with or services rendered to an employer who is resident in Kenya or to a permanent establishment in Kenya is subject to income tax charged at the prevailing individual income tax rates. Non-Residents are however not entitled to any personal relief.

 How do I file for Individual Income Tax Returns?

An individual income tax return is a declaration of income earned by an individual within a particular year. Every individual with a KRA PIN is required to file this return.

You can file your Individual Income Tax Returns for a particular year of income, anytime between 1st January to 30th June of the following year. Submission of income tax returns is an online process done via iTax.

 If you have no income to declare, you are required to file a NIL return.