Significant Economic Presence (SEP) Tax in Kenya
Your Trusted Partner for Digital Tax Compliance in Kenya
Make SEP Tax and VAT compliance easy.
Whether you’re running an e-commerce site, streaming platform, or a SaaS business, we help non-Kenyan digital businesses navigate Kenya’s tax rules without the stress.
Taxation of Digital Non-Kenyan Businesses in Kenya
If your business sells digital products or services to Kenyan customers, you’re subject to two taxes - even if you have no local presence.
1. Significant Economic Presence (SEP) Tax
Introduced in December 2024 to replace the 1.5% Digital Services Tax (DST). SEP is a 3% direct tax on gross revenue earned from Kenyan users.
It applies to platforms earning over KSh 5 million annually (~USD 40,000) from Kenya. That’s just KSh 416,000 per month (~USD 3,300).
e.g. Streaming, hosting, ride-hailing, marketplaces - if your business has Kenyan users, you qualify.
2. VAT on Digital Services
VAT is a 16% indirect tax on all digital sales to Kenyan consumers.
There’s no minimum revenue threshold, every sale counts, whether it’s $10 eBook or a $10,000 SaaS subscription.
As a non-resident, you’re responsible for collecting and remitting this VAT to the Kenya Revenue Authority (KRA).
What Happens If You Don’t Comply?
KRA may impose:
Financial Penalties: Up to 20% of unpaid tax plus 1% monthly interest (e.g., KSh 20,000 penalty on a KSh 100,000 liability).
Market Restrictions: KRA may block your sites or apps via the Communications Authority of Kenya, cutting off Kenyan users.
International Enforcement: Under tax treaties, KRA can recover taxes through your country’s revenue authority.
How can we Help You comply
We’ve helped global businesses avoid fines and simplify their tax operations in Kenya. Here’s our simple 4-Step compliance process:
✅ Consultation: We assess your needs and recommend the applicable tax category between SEP and VAT.
✅ Onboarding & Registration: We gather your details and handle KRA registration.
✅ Monthly Compliance: You provide sales data; we calculate, file returns, and provide payment instructions.
✅ Ongoing Support: We keep you informed and answer your questions.
Our team is KRA-licensed and OECD-trained, giving you global-standard compliance tailored to Kenya’s evolving tax laws. We proactively update our clients on changes in Kenyan digital tax legislation and KRA practices.
How We Helped a webhosting Platform Succeed
A global webhosting service was slapped with a non compliance notice by KRA. With millions in Kenyan revenue but no local presence, they risked penalties for non-compliance. ClearTax stepped in, negotiated with KRA, registered them on iTax, calculated their SEP tax and VAT liabilities, and filed their returns. This saved them over $50,000 in backdated penalties.
Here’s What Our Clients Say
“Their SEP expertise saved us time and stress. We are now fully compliant with KRA. Our customers are also happy.”
– Saurabh, CFO, Simplotel LTD
"Handling Kenya’s tax was daunting until we partnered with ClearTax. Their expertise in KRA regulations and quick audit support gave us peace of mind. They’re now our go-to for all digital tax needs in Kenya."
- Daniel, Director, tickets sale business
"As a blockchain business, we found VAT and SEP compliance daunting. ClearTax’s expertise in crypto transactions made it straightforward and cost-effective, guiding us through every step. Their tailored approach saved us from KRA penalties and boosted our confidence to expand in Kenya."
- Mike, Crypto firm
"What I appreciate most about ClearTax is their responsiveness and clarity. They explain complex Kenyan tax matters in simple terms and are always quick to answer our questions. Managing VAT and SEP tax from abroad is much easier with their reliable support."
- Susan, Ecommerce platform
Choose the Right Plan for Your Business
- ✅ Initial Consultation
- ✅ Monthly VAT calculation & filing
- ✅ Ongoing advisory
- ✅ Initial Consultation
- ✅ Monthly VAT & SEP Calculation & Filing
- ✅ Ongoing Advisory
- ✅ All Tier 2 services
- ✅ Dedicated account manager
- ✅ Enhanced reporting
- ✅ Priority support
- ✅ Initial consultation
- ✅ Documents compilation
- ✅ Registration with KRA
Stay Ahead of SEP Tax Trends
Explore our insights to understand Kenya’s digital tax landscape:
> Understanding Kenya’s 3% SEP Tax & 16% VAT in 5 Minutes
> 8 costly SEP & VAT mistakes to avoid in Kenya
Frequently Asked Questions (FAQ)
Who must pay SEP & VAT in Kenya?
Any non-resident digital business selling to Kenyan consumers.
Can I be taxed if I don’t have a business in Kenya?
Yes. Kenya taxes based on where your customers are, not where your office is. SEP and VAT apply to foreign digital sellers.
How do I know if I owe SEP tax?
If your digital business earns over KSh 5 million annually from Kenyan users, you’re liable. Use geo-tracking or payment data to monitor revenue.
What happens if I ignore SEP and VAT?
KRA can impose penalties, seek help from your tax authority, or block access to your platform via the CAK.
How can ClearTax help?
We handle everything - registration, filing, audits, and strategy.
How do I get started?
Just book a free consultation. We’ll assess your risk and show you the way forward.
Don’t Let Compliance Be a Roadblock
Join 15+ international digital businesses already working with ClearTax. Stay compliant, avoid penalties, and operate with confidence in Kenya.
Trusted by 15+ non-Kenyan digital businesses