The High Court of Kenya recently issued judgement on a case on Value Added Tax (VAT) and held that one cannot separate land and the commercial buildings on it, thus maintaining that VAT is chargeable at 16% on the total value of the property.
This was in the case National Bank of Kenya Limited vs Commissioner of Domestic Taxes (Income Tax Appeal No’s. E155 & 533 of 2020).
In determining National Bank’s case, the High Court noted that is no binding precedence on the issue of chargeability of VAT in commercial premises given that there is a stay in judgment pending appeal of the David Mwangi Ndegwa v Kenya Revenue Authority [2018] eKLR case which had ruled that VAT is not chargeable on the sale or renting of commercial premises.
With these recent developments, one needs to carefully consider all VAT implications before buying or selling property.
Property Boutique has a fully-fledged tax law advisory business unit that offers a vast range of tax services. Our highly qualified and experienced personnel will assist you with your tax matters and ensure that your business is tax compliant and assist you to analyse and mitigate any tax risks or exposure.
For more information and assistance on the above, please contact our tax advisory team through email at info@propertyboutique.co.ke.
