Kenya — Outsourcing taxable value
This page records one dated change. For the rules in Kenya as they stand today, see the Kenya guide →
- Jurisdiction
- Kenya
- Tax
- VAT
- Change type
- Update
- Status
- In force
- Impact
- Action required
- Effective
- 1 July 2026
- Instrument
- KE-FINACT-19-2026
- Systems
- Tax engine, ERP, Invoicing
- Verified
- Corroborated against official id · medium confidence
Reconfigure VAT invoicing for Kenyan labour-outsourcing and staffing engagements so that only the service fee or margin is subject to VAT, excluding pass-through employee costs.
Tax engineERPInvoicing
Kenya’s Finance Act, 2026 (Act No. 19 of 2026, signed into law on 23 June 2026) inserts subsections (5A) and (5B) into section 13 of the VAT Act, CAP 476. Where a supplier of labour, outsourcing or employee placement services incurs employee-related costs such as salaries, wages and statutory deductions, those costs are deemed to be disbursements made on behalf of the client and are excluded from the taxable value of the supply, so VAT applies only to the supplier’s service fee or margin.