1. The Big Change: Auto-Prefilled VAT Returns
The days of manually typing your export values into the VAT return are over. Under the new directive, KRA will use validated export data from the customs system (iCMS) to automatically populate the “zero-rated supplies” section of your iTax return.
-
What’s Included: This integration covers all exports to foreign countries, the Single Customs Territory, Export Processing Zones (EPZs), and Special Economic Zones (SEZs).
-
The Goal: KRA aims to tighten oversight on zero-rated supplies, reduce manual errors, and eliminate fraudulent VAT refund claims based on fictitious export figures.
2. New Requirements for Exporters & Agents
Automation requires precise data. To ensure your export values appear correctly in your VAT return, exporters and clearing agents must now follow a strict protocol when lodging documents in iCMS:
-
The Exporter’s PIN: Every customs entry must be linked to a valid Personal Identification Number (PIN).
-
eTIMS Integration: You must capture a valid TIMS or eTIMS zero-rated invoice number at the point of lodging export documents.
-
Validation Rule: Only values validated in iCMS and correctly linked to both the PIN and eTIMS invoice will be allowed in the VAT return. If the data doesn’t match, the pre-fill will fail, potentially leading to compliance red flags.
3. What About Exported Services?
The digital net is also being cast over service providers. Exports of taxable services will also be pre-filled in iTax. This will be based on the generated and transmitted eTIMS invoices for the applicable tax period, ensuring that service exports are just as transparent as physical goods.
