DIGITAL SERVICE TAX (DST)
1. What is Digital Service Tax (DST)?
Digital Service Tax (DST) is payable on income derived or accrued in Kenya from services offered through a digital marketplace.
2. What is a Digital Market Place?
A digital marketplace is a platform that enables direct interaction between buyers and sellers of goods and services through electronic means.
3. When is the Effective date for DST?
Digital Service Tax was introduced in the Finance Act 2020, and becomes effective from 1st January 2021.
4. What is the rate of DST?
1.5% of the gross transaction value:
a). In the case of the provision of digital services, the payment received as consideration for the services; and
b). In the case of a digital marketplace, the commission or fee paid to the digital marketplace provider for the use of the platform
Note: The gross transaction value is exclusive of VAT.
5. How will KRA collect DST?
Digital service providers operating in the digital marketplace in Kenya will be required to file a DST return and make payment for the tax due, on or before the 20th day of the following month that the digital service was offered.
6. What is the due date for DST?
DST is due on a monthly basis, on or before the 20th day of the following month that the digital service was offered.
7. Who pays DST?
Resident and Non – Resident:
i). Digital service providers
ii). Digital market place providers, or
iii). Their appointed tax representatives (in the case of non-resident digital service providers or digital marketplace providers without a permanent establishment in Kenya).