- The Kenya High Court ruled that commissions received by licensed payment service providers (PSPs) for facilitating digital financial transactions are exempt from VAT.
- The Court clarified that VAT exemption depends on the nature of the service (facilitating payments as financial services), not on the provider’s licensing status or use of a digital platform.
- The ruling emphasized that ambiguities in tax law should be interpreted in favor of the taxpayer.
- The decision overturned a previous Tribunal ruling and a VAT assessment by the Kenya Revenue Authority, which had argued that PSPs were not eligible for VAT exemption.
- The case establishes that PSPs’ commissions for processing payments qualify as VAT-exempt financial services.
Source: taxnews.ey.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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