Add or remove 16% VAT, with an 8% fuel-rate option.
VAT amount
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Net (excl VAT)
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Gross (incl VAT)
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Worked example
Take a net (VAT-exclusive) price of KES 10,000 for a standard-rated supply and add 16% VAT. The VAT is 10,000 times 16%, which is KES 1,600, so the gross (VAT-inclusive) price is KES 11,600. To go the other way, if a customer is quoted KES 11,600 including VAT, you extract the VAT by multiplying the gross by 16 over 116, which gives the same KES 1,600 and a net price of KES 10,000.
Item
Amount (KES)
Net price (excl VAT)
10,000
VAT at 16%
1,600
Gross price (incl VAT)
11,600
VAT is about 13.8% of the gross price and 16% of the net price, which is why pulling it out of a tax-inclusive figure uses 16 over 116 rather than a flat 16%. The chart splits the KES 11,600 gross into the net price and the VAT.
How it is calculated
Value Added Tax in Kenya has a standard rate of 16% and a reduced rate of 8% on petroleum fuels. To add VAT to a net price, multiply by 1 plus the rate, so 1.16 at the standard rate or 1.08 for fuel. To remove VAT from a price that already includes it, multiply the gross by the rate divided by 1 plus the rate, which is 16 over 116 at the standard rate. VAT is a tax on consumption: a registered business charges output VAT on its sales and reclaims input VAT on its purchases, remitting only the difference to the Kenya Revenue Authority. Some supplies are zero-rated, such as exports, and others are exempt, which changes whether input VAT can be recovered. Registration is compulsory once taxable turnover passes KES 5,000,000 in any 12 months, and non-resident suppliers of digital services must register regardless of turnover.
Frequently asked questions
How do I work out VAT in Kenya?
To add VAT, multiply the net price by 1.16 (or 1.08 for petroleum fuels). To pull VAT out of a price that already includes it, multiply the gross by 16/116, which is the same as the rate divided by one plus the rate. The standard rate is 16% and the fuel rate is 8%.
What is the difference between zero-rated and exempt supplies for Kenyan VAT?
Both zero-rated and exempt supplies are sold without charging VAT to the customer, but the treatment for the seller differs. A supplier making zero-rated sales, such as exports, can still recover input VAT paid on related purchases, so VAT is effectively a nil cost. An exempt supplier cannot recover input VAT, so the tax paid on purchases becomes a genuine business cost. The distinction matters most for businesses with mixed supplies, where only the taxable portion generates input-VAT recovery.
Does VAT apply to services provided online to Kenyan customers by foreign businesses?
Yes. Non-resident digital service suppliers are required to register for VAT in Kenya and charge the standard 16 percent rate on supplies such as streaming, software subscriptions, and app downloads to Kenyan customers. There is no minimum turnover threshold for foreign digital suppliers; the obligation arises from the first sale. This rule has applied since the Finance Act amendments that brought digital services into scope, and the KRA has a simplified registration process for qualifying non-resident businesses.
When is the 8% fuel VAT rate used instead of the standard 16% in Kenya?
The 8 percent rate applies specifically to petroleum fuels as defined under Kenyan VAT law, including petrol and diesel at the pump. It was introduced as a reduced rate to moderate the impact of VAT on fuel prices. All other standard-rated supplies use the 16 percent rate. If you are pricing a fuel supply or reconciling a fuel invoice, select the 8 percent option in this calculator; for everything else, the standard 16 percent applies.