Financial Requirements & Information:
Average Accounting Costs:
- Mandatory annual audit, by external auditors
- Costs depend on the size of business, turnover and the number of transactions per month
- For Small Companies: at least Kshs. 30,000/= per annum
- Monthly accounting costs also depend on size of business and number of transactions per month
- For Small Companies: at least Kshs. 5,000/= per month
Retention of Accounting Records:
- Accounting records must be kept at the company’s registered office.
- The Accounts records must be open at all times to inspection by the officers of the company.
- The records must be retained for at least 7 years from, and including, the date on which they were created.
Setting and Changing Accounting Reference Periods:
- Accounting reference period should be set at the anniversary of the company’s incorporation;
- Provided that the first reference period is at least 6 months and not more than 18 months.
- A company may change its current, or preceding, accounting reference period through a notice to the Registrar.
- NB: Such notice is not effective if given less than 5 years after the end of an earlier extension to an accounting reference period.
- e. A company can only extend its accounting period once in a 5 year period unless waived by the Company Secretary.
- Reference periods cannot be extended by more than 8 months.
- Companies are, in some cases, required to distribute summary financial statements to those entitled to receive copies.
- A quoted company must publish its annual reports and audited financial statements including its preliminary results on its website.
- All published financial statements must remain available on the website for at least one year.
- Offences and fines relating to Financial Reporting range Kshs. 500,000/= to KES 2 million: Companies Act 2015 – Presentation 3.
- Value Added Tax (VAT)
- VAT must be paid Monthly
- VAT is mandatory if the business earns an annual income above Kshs. 5 million
- VAT is levied on consumption of taxable goods & services
- Currently and in general the VAT rate is 16%
- NB VAT is 14% on restaurant and hotel services
- Turnover Tax
- Turnover Tax must be submitted Quarterly
- Turnover Tax is mandatory if the business earns an annual income between
500,000/= & Kshs. 5 million
- Turnover Tax is an Indirect tax, chargeable at 3% of total sales
- Corporation Tax
- Corporation Tax is liable on the Company’s worldwide trading profits
- The rate of Corporation Tax is currently 32.5%
- It is advisable to seek the services of a taxation advice consultant to ensure compliance
- Statutory Monthly Payments:
- PAYE To be paid by the 9th of each month
- NHIF To be paid by the 15th of each month
- NSSF To be paid by 15th of each month
- VAT To be paid by 20th of each month
NB: If the payment date falls on a weekend, payment needs to be made on or before the last working day before that date
To find more Information about where to pay please use this link: http://www.kra.go.ke/index.php/kra-portal
Note: All regulatory information on Company Accounting Records as well as Financial Statements can be viewed under the new Companies Act, 2015 – Part 25 (Pages 620 – 704).
More information can also be accessed via the following file: Documents on new Companies Act, 2015