Kenya VAT for Foreign Providers of Digital Services: What You Need to Know About Significant Economic Presence Tax

When foreign providers of digital services register for VAT in Kenya, they are automatically enrolled in Significant Economic Presence Tax (SEPT) at the same time by the Kenya Revenue Authority (KRA). This happens as part of the registration process — it is not a separate step you need to take.

This article explains what SEPT is, how it differs from VAT, and what you need to manage independently — outside of Taxually.

Taxually manages your VAT obligations in Kenya only. SEPT is a separate income tax that falls outside our scope, so we want to make sure you have a clear picture of both obligations.

What is Significant Economic Presence Tax?

SEPT is a tax on income earned by non-resident companies from providing services to users in Kenya over the internet or any electronic network — whether through a third-party marketplace or directly through your own website or platform. It replaced the earlier Digital Services Tax (DST) with effect from 27 December 2024, under the Tax Laws (Amendment) Act, 2024.

It applies even if your company has no physical presence in Kenya. The trigger is simply that your users — or customers — are located in Kenya.

The effective SEPT rate is 3% of gross revenue from digital services provided to Kenyan users. This is calculated in two steps: KRA deems 10% of your gross turnover to be taxable profit, then applies the 30% corporate income tax rate to that amount.

Why Am I Enrolled in SEPT Automatically?

When you register for VAT as a foreign provider of digital services on the KRA portal, the system automatically enrolls you in SEPT as well. This is how the KRA portal is designed — it treats both taxes as linked obligations for non-resident digital service providers.

You do not opt in to SEPT, and you cannot opt out at the point of registration.

How SEPT Differs from VAT

It is easy to confuse the two because they apply to similar activities, but they are very different taxes. Here is a quick comparison:

Filing and Payment: What You Need to Know

SEPT returns and payments are due monthly — specifically by the 20th of the month following the month in which you provided the digital services.

For example, if you provide services to Kenyan users in January, your SEPT return and payment are due by 20 February.

SEPT is filed and paid directly on the KRA iTax portal (itax.kra.go.ke). KRA’s official guidance and user guides for non-resident providers are available at kra.go.ke.

How to calculate your SEPT liability:

• Step 1: Identify your gross revenue from digital services provided to Kenyan users during the month.

• Step 2: Calculate 10% of that amount — this is your deemed taxable profit.

• Step 3: Apply 30% to the deemed profit — this is the SEPT due.

• In practice: this equals 3% of your gross revenue from Kenyan users.

What Taxually Handles vs What You Manage

What Taxually handles:

• VAT registration — taken care of on your behalf.

• VAT filings — we prepare and submit your Kenya VAT returns each month.

• VAT payments — we keep you informed of what is due and when.

What you need to manage independently:

• SEPT filings — monthly, via KRA iTax, by the 20th of the following month.

• SEPT payments — 3% of gross revenue from Kenyan users each month.

• Record-keeping — maintain records of gross transaction values for digital services to Kenyan users.

Accessing the KRA Portal for SEPT

To file and pay SEPT, you will need access to the KRA iTax portal (itax.kra.go.ke) using the KRA credentials associated with your Kenya VAT registration.

If you plan to handle your own SEPT compliance, please contact Taxually to request your KRA login details. We can provide you with the credentials linked to your registration.

Where to Get Help with SEPT

Because SEPT is an income tax — not an indirect tax like VAT — it requires different expertise to manage. We recommend:

• A Kenya-based tax adviser who can review your specific circumstances and ensure your SEPT filings are accurate.

• KRA’s official guidance — available at kra.go.ke — including guidance for non-resident digital service providers.

• KRA’s contact centre — available on +254 (020) 4 999 999 or callcentre@kra.go.ke for iTax technical queries.

Key Takeaways

• SEPT enrolment is automatic when you register for Kenya VAT as a foreign digital service provider — you do not need to do anything extra.

• SEPT replaced DST with effect from 27 December 2024, under the Tax Laws (Amendment) Act, 2024.

• SEPT is separate from VAT — it is a 3% income tax on gross revenue from digital services to Kenyan users.

• Taxually handles your VAT only. SEPT compliance is your responsibility.

• File and pay monthly, by the 20th of the following month, via KRA iTax.

• Consider local advice to make sure your SEPT filings are accurate and complete.

Disclaimer: This article is provided for general informational purposes only. It does not constitute tax, legal, or financial advice, and should not be relied upon as such. Tax laws and regulations are subject to change, and your specific circumstances may affect how they apply to your business. Taxually accepts no liability for any actions taken or not taken based on the information in this article. We strongly recommend that you seek independent advice from a qualified Kenya-based tax professional before making any decisions relating to your SEPT obligations.