- The Kenya High Court ruled that digital platforms exercising significant control over transactions are considered principal sellers for VAT purposes.
- The court found that platforms setting prices, dispatching service providers, issuing invoices, and collecting payments are liable for VAT on the full customer payment, not just their commission.
- Private tax rulings from the Kenya Revenue Authority cannot override statutory interpretation by the courts.
- The decision broadens VAT exposure for digital marketplace operators, affecting both resident and nonresident platforms, especially those with operational or economic control.
- Platforms must reassess their business models and compliance due to increased audit risk and potential VAT liability on total transaction values.
Source: kpmg.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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