Deduction of Input VAT by Trade Agents

Kenya Revenue Authority informs the public that it has observed with concern the emerging practice where some trade agents, including customs clearing agents, are erroneously claiming input VAT in relation to supplies made to their principals.

The VAT Act, 2013 read together with The VAT (Electronic Tax Invoice) Regulations, 2020 requires a registered person who makes a taxable supply to furnish the purchaser with a tax invoice at the time of supply. Every Tax Invoice should be issued in the name and PIN of the supplier and purchaser.

Therefore, in a tripartite transaction (involving the supplier, trade agent and the principal purchaser) where an agent transacts on behalf of a purchaser or consignee:

  1. The supplier should invoice the purchaser or consignee for the supplies made to them and not the clearing or trade agent. The purchaser or consignee is the party entitled to deduct input VAT in relation to such a supply.
  2. The purchaser or Consignee should only deduct input tax where they have in their possession the documents required under Section 17(3) of the VAT Act, 2013.
  3. Any input VAT deducted by trade agents, including customs clearing agents, contrary to the VAT Act and the guidance provided in this notice shall be disallowed and applicable penalties imposed.

All registered taxpayers who engage in this kind of trading arrangements are advised to observe these guidelines and the VAT Act when invoicing for supplies made under tripartite transactions.

For further clarification and facilitation, please contact the Contact Centre on Tel: 020 4 999 999, 0711 099 999 or Email:             

Commissioner for Domestic Taxes          


Deduction of Input VAT by Trade Agents