The Kenya Revenue Authority has issued a public notice to clarify that payments for training services designed to improve staff skills or knowledge are subject to Withholding Tax at the rates of 5% and 20% for Residents and non Residents respectively. Persons making payment for training services are therefore required to deduct and remit tax as provided under sections 35(1) (a) and 35(3) of the Income Tax Act.

Additionally, training services attract VAT for Resident suppliers and Reverse VAT for Non – Resident suppliers, the latter to be remitted by the person making the payment. Tax is however not chargeable on educational services offered to students by registered educational institutions.

The clarification has been issued the following upsurge in courses offered locally by foreign consultants targeting mainly the higher echelon executive cadre.