What is PIN?

What is PIN?

Personal Identification Number (PIN) is a number which identifies a person for purposes of transacting business with Kenya Revenue Authority, other Government agencies and service providers. It is processed by Domestic Tax Department. Personal includes both an individual as well as an artificial person (i.e. company, club, Trust, etc)

Who should get a PIN

·         A Partnership, where the partners are not husband and wife, must obtain PIN.

·         Any artificial body must get its own PIN

·         A sole proprietorship will use the proprietor’s individual PIN for all transactions.

What is the purpose of pin?

Under the 13th schedule of the Income Tax Act, transactions requiring Pin include, among others, the following:-

• Registration of title, stamping of instruments by the Commissioner of Lands, and payment of Land Rent.
• Approval of plans, payment of water deposits, application for a business permit, payment of Land Rent by Local Authorities.
• Registration of Motor Vehicles, and licensing under the Traffic Act (Cap 403) by the Registrar of motor Vehicles.
• Registration of Business Names and Companies by the Registrars of Business names and companies.
• Trade licensing by the Ministry of Commerce.
• Application for Value Added Tax registration.
• Underwriting policies by Insurance Companies.
• To facilitate importation of goods, Customs clearing and forwarding at the offices of Commissioner of Customs and Excise.
• Payment of Deposits for power connections at Kenya Power and Lightning Co. Ltd.
• To facilitate all contracts for supply of goods and services to all Government Ministries and Public bodies.

Which documents should bear PIN?

• Returns, Statements or other documents submitted to the Commissioner by any person required to do so.
• Returns, Statement or other document submitted to the Commissioner on behalf of another person should include PIN of the person on whose behalf they are submitted, e.g. an employer who is submitting a return, statement or other document on behalf of his employee should include that employer's PIN.

Tax amnesty on foreign income ends on 31st December 2017

The amnesty guidelines is cited as “guidelines on amnesty in respect of foreign assets and income 2017 and came into effect on 1^st January 2017. The amnesty covers the principal tax, penalties and  interest relating to income earned outside Kenya that would have been taxable under Kenyan tax laws if it had been accrued or derived in Kenya or deemed to have been accrued or derived in Kenya.

Disclosure

• The application for amnesty done online through the iTax platform comprising of 8 sections that considers all the sources of income earned abroad.
• Full disclosure is done on the return, a person is not required to provide any further details or supporting documentation. 
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• In order to qualify for amnesty, the full physical repatriation of the asset is mandatory latest 30^th June 2018. Five year extensions with a penalty of 10% is to be levied for late repatriation
• Upon completing the online application, a person is issued with an acknowledgement copy. A system generated certificate is then issued to the applicant once the amnesty has been granted.

Qualifying assets and income

•  The income subject to tax amnesty is foreign income 
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•   Assets held outside Kenya whose income could fall within the amnesty regime include bank deposits, investment portfolios, insurance policies, shares or other property situated outside Kenya which are funded from income derived from or accruing from sources within or outside Kenya, including those held under Trust.
• The value of the asset will be the cost or the best estimate of the market value as determined by the applicant 

Qualifying applicants

•  Persons who can apply for amnesty include an individual, a company, a partnership, a limited liability partnership, associations of persons, a trust, National Government, foreign government, political subdivision of the National Government or foreign government, or an international organization, if a tax resident of Kenya when generating the income.
•  A person who was a Kenyan resident at the time of earning the foreign income and did not declare the income qualifies for amnesty notwithstanding their residency status when applying for the amnesty.
• A person who was a nonresident at the time of earning foreign income which should have been taxed in Kenya can also make an application for amnesty for such income.
• Married couples may file a joint return and the assets and income of a minor may be declared by the parent or legal guardian.
•  For assets held in a trust, the application for amnesty may be submitted by the trustee, settlor or beneficiary/beneficiaries of the trust.

Exceptions

The amnesty shall not apply to:

• Income earned in Kenya
• Income earned outside Kenya but already declared and taxed in Kenya
• A person who has been assessed or under a tax audit or investigation by the Commissioner with respect to assets, liabilities and income that qualify for the amnesty

Implications of the amnesty

The tax amnesty on foreign income comes will bring high net worth individuals taxpayers into the bracket to raise the tax revenues for the Government.