Step by step guide

1. Gather Required Documents

Before you start, make sure you have the necessary documents:

  • P9 Form (for employees)
  • KRA PIN certificate
  • Bank statements, expense receipts, and other relevant financial documents (for self-employed individuals and businesses)

2. Log In to the iTax Portal

  1. Visit the KRA iTax portal.
  2. Enter your KRA PIN and click on ‘Continue.’
  3. Enter your password and solve the arithmetic question (security check), then click ‘Log In.’

3. Navigate to the Returns Section

  1. Once logged in, go to the ‘Returns’ menu on the top navigation bar.
  2. Select ‘File Return.’

4. Select the Appropriate Return Form

  1. Choose the type of return you are filing (e.g., Income Tax - Resident Individual for most employees).
  2. Download the relevant form if required (usually an Excel sheet).

5. Fill Out the Return Form

  1. Open the downloaded Excel form.
  2. Fill in your personal details and income information accurately. For employees, most details can be taken from the P9 form provided by your employer.
  3. Ensure all income sources, tax paid, and reliefs are correctly entered.

6. Upload the Filled Return Form

  1. Save the completed form on your computer.
  2. Go back to the iTax portal iTax portal and click ‘Upload Return’ in the ‘Returns’ section.
  3. Select the completed form from your computer and upload it.
  4. Confirm the details and submit.

7. Acknowledge and Download the Receipt

  1. After submission, you will receive an acknowledgment receipt.
  2. Download and print the receipt for your records.

Special Considerations for Different Types of Returns

  • Nil Returns: If you have no income to declare, you can file a nil return directly on the iTax portal iTax portal without downloading any forms. Select ‘Income Tax - Resident Individual Nil Return’ and follow the on-screen instructions.
            

Step-by-Step Guide to Filing Nil Returns

  1. Access the iTax Portal iTax Portal

  2. Log In to Your iTax Account

    • Enter your KRA PIN and click on ‘Continue.’
    • Enter your Password and solve the arithmetic question (security check).
    • Click on ‘Log In.’

  3. Navigate to the Returns Menu

    • Once logged in, go to the top navigation bar and click on the ‘Returns’ menu.
    • From the dropdown menu, select ‘File Nil Return’. This option is typically found under the ‘Returns’ section, but if it’s not directly visible, you may need to select ‘File Return’ first and then choose the type of return.

  4. Select the Return Type

    • Choose ‘Income Tax - Resident Individual Nil Return’.
    • Ensure you select the correct return period (e.g., January 1, 2023, to December 31, 2023).

  5. Submit the Nil Return

    • Confirm that you are filing a nil return for the specified period.
    • Click on the ‘Submit’ button.

  6. Acknowledgment Receipt

    • After submission, you will receive an acknowledgment receipt.
    • Download and print this receipt for your records. This is proof that you have successfully filed your nil return.

Important Points to Note

  • Deadline: The deadline for filing returns is June 30th of the following year. For instance, returns for the year 2023 should be filed by June 30, 2024.
  • Penalties: Failure to file returns, even nil returns, can result in penalties. For individual taxpayers, the penalty is KSh 2,000 or 5% of the tax due, whichever is higher.
  • Annual Requirement: Filing nil returns is an annual requirement for those without taxable income. Even if you have no income year after year, you must still file a nil return each year.
  • Business Returns: For businesses, ensure you have all necessary financial statements and documents. The process is similar, but the forms will be specific to corporate tax returns. Filing business returns in Kenya involves a more detailed process compared to individual or nil returns, as it requires the submission of comprehensive financial statements and documents. Here’s a step-by-step guide on how to file business returns using the KRA iTax portal:

Step-by-Step Guide to Filing Business Returns

1. Gather Necessary Documents

Before you start the filing process, ensure you have the following documents:

  • Financial Statements: Balance sheet, profit and loss statement, and cash flow statement.
  • Bank Statements: All business bank account statements.
  • Expense Receipts: Documentation of all business expenses.
  • Invoices and Sales Records: Records of all sales and income.
  • Previous Tax Return: If available, for reference.

2. Access the iTax Portal

3. Log In to Your iTax Account

  • Enter your KRA PIN and click on ‘Continue.’
  • Enter your Password and solve the arithmetic question (security check).
  • Click on ‘Log In.’

4. Navigate to the Returns Menu

  • Once logged in, go to the top navigation bar and click on the ‘Returns’ menu.
  • From the dropdown menu, select ‘File Return’.

5. Select the Appropriate Return Form

  • Choose the type of return that applies to your business, usually ‘Income Tax - Company Return’ or ‘Income Tax - Partnership Return’, depending on your business structure.
  • Download the relevant form if required (often an Excel sheet for detailed financial data).

6. Fill Out the Return Form

  • Open the downloaded Excel form.
  • Enter your business details and financial information accurately. This includes income, expenses, assets, liabilities, and any applicable deductions.
  • Ensure all figures are correct and supported by your financial statements.

7. Upload the Filled Return Form

  • Save the completed form on your computer.
  • Go back to the iTax portal and click ‘Upload Return’ in the ‘Returns’ section.
  • Select the completed form from your computer and upload it.
  • Confirm the details and submit.

8. Submit the Return

  • After uploading the form, the system will prompt you to review the information.
  • Ensure all details are accurate and complete.
  • Click on ‘Submit’ to file the return.

9. Acknowledgment and Payment

  • After submission, you will receive an acknowledgment receipt.
  • Download and print this receipt for your records.
  • If there is any tax payable, follow the instructions provided to make the payment. This can be done through various channels like bank transfer, mobile money (M-Pesa), or other payment options provided by KRA.

Important Points to Note

  • Filing Deadline: The deadline for filing business tax returns depends on your financial year-end. For most businesses, it is six months after the end of the financial year.
  • Accuracy: Ensure all information is accurate and supported by documentation to avoid audits and penalties.
  • Penalties for Late Filing: Late filing can attract significant penalties. For companies, the penalty is KSh 20,000 or 5% of the tax due, whichever is higher.
  • Professional Assistance: If your business finances are complex, consider seeking assistance from a tax professional or accountant.

IS IT A MUST TO FILE KRA RETURNS?

Yes, it is mandatory to file Kenya Revenue Authority (KRA) returns in Kenya. This requirement applies to all individuals and entities registered with the KRA, including those without taxable income. Here's a breakdown of the key points:

  1. Individual Income Tax Returns: All Kenyan residents with a KRA PIN are required to file annual income tax returns, even if they have no taxable income. This includes salaried employees, self-employed individuals, and those with other sources of income.

  2. Nil Returns: Individuals without any taxable income must file nil returns. This is a declaration that they did not have any income to report for the specified tax period.

  3. Corporate Tax Returns: Businesses and corporations must also file annual tax returns, detailing their income, expenses, and any taxes due.

  4. Penalties for Non-Compliance: Failure to file returns can result in penalties and fines. For individuals, the penalty for late filing is KSh 2,000 or 5% of the tax due, whichever is higher. For companies, the penalty is KSh 20,000 or 5% of the tax due, whichever is higher.

  5. Filing Deadlines: The filing deadline for individual income tax returns is June 30th of the following year. For example, returns for the year 2023 should be filed by June 30, 2024. Corporate tax return deadlines may vary based on the company's financial year.