eTIMS Tax Types A, B, C, D and E in Kenya
Short answer: In the KRA eTIMS code set used by Risiti, A is exempt, B is standard VAT at 16%, C is zero-rated at 0%, D is non-VAT, and E is reduced-rate VAT at 8%. The correct code depends on both the seller's VAT registration and the legal tax treatment of the specific good or service.
eTIMS Tax Type Code Table
| Code | Meaning | Rate | Typical use |
|---|---|---|---|
| A | Exempt | 0% | A supply listed as VAT-exempt under the applicable law |
| B | Standard VAT | 16% | A standard-rated taxable supply by a VAT-registered seller |
| C | Zero-rated VAT | 0% | A legally zero-rated supply by a VAT-registered seller |
| D | Non-VAT | 0% | A sale by a seller that is not registered for VAT |
| E | Reduced-rate VAT | 8% | A supply to which the current reduced VAT rate legally applies |
Practical note: The rate alone does not determine the code. A, C and D can all calculate zero tax, but they describe different legal situations and should not be used interchangeably.
How to Choose the Tax Type
- ✓Confirm whether the seller is registered for VAT. A non-VAT seller should not charge output VAT merely because a customer requests a VAT invoice.
- ✓Identify the actual good or service being supplied. VAT treatment attaches to the supply, not to a convenient generic category.
- ✓Check whether the supply is standard-rated, reduced-rate, zero-rated, or exempt under current law and KRA guidance.
- ✓Assign the correct code to each catalogue item before invoicing, especially when one invoice contains supplies with different treatments.
- ✓Review the taxable amount, tax amount, and inclusive total before submitting the invoice.
- ✓When uncertain, confirm with KRA or a qualified Kenyan tax professional before issuing the final invoice.
Exempt vs Zero-Rated vs Non-VAT
| Treatment | Seller context | Output rate | Key distinction |
|---|---|---|---|
| A — Exempt | The supply itself is exempt | 0% | No output VAT is charged because the law exempts that supply |
| C — Zero-rated | Usually a VAT-registered seller making a zero-rated supply | 0% | The supply remains within VAT but is taxed at zero |
| D — Non-VAT | The seller is not VAT registered | 0% | The seller is outside VAT charging for that sale |
Practical note: Do not label every zero-tax invoice as exempt. The distinction affects records, returns, reporting, and how a buyer interprets the invoice.
Tax Calculation Examples
B — 16% VAT
If KES 1,160 is VAT-inclusive, the taxable amount is KES 1,000 and VAT is KES 160, subject to rounding and the invoicing system's calculation rules.
E — 8% VAT
If KES 1,080 is reduced-rate VAT-inclusive, the taxable amount is KES 1,000 and VAT is KES 80, subject to rounding.
A or C — 0%
The calculated output tax is zero, but the invoice must retain the legally correct exempt or zero-rated classification.
D — Non-VAT
A non-VAT seller records the sale without charging VAT. This is not the same assertion as saying the product is VAT-exempt.
Common Tax-Type Mistakes
- ✓Using A (exempt) for every non-VAT business instead of D (non-VAT).
- ✓Using C (zero-rated) simply because the calculated tax should be zero.
- ✓Charging B (16%) when the seller is not VAT registered.
- ✓Applying one code to an invoice that contains items with different VAT treatments.
- ✓Hard-coding a rate and failing to update the item catalogue when tax law changes.
- ✓Correcting a submitted tax mistake by editing the PDF instead of issuing the appropriate eTIMS correction.
What to Do After Using the Wrong Tax Code
Do not alter the downloaded PDF or create an unexplained duplicate. Locate the accepted original invoice in the same eTIMS solution that issued it and use the supported credit-note flow to reverse all or part of the transaction.
After the correction is accepted, fix the item's saved tax type before issuing the replacement invoice. Keep the original invoice, credit note, and corrected invoice together for reconciliation and audit support.
Official KRA Sources
Frequently Asked Questions
What is tax type A in eTIMS?
Tax type A represents an exempt supply at 0%. Use it only when the good or service is legally VAT-exempt, not merely because the seller is not VAT registered.
What is tax type B in eTIMS?
Tax type B is the standard 16% VAT treatment. It is used by VAT-registered sellers for supplies subject to the general VAT rate.
What is tax type C in eTIMS?
Tax type C represents a zero-rated VAT supply at 0%. Zero-rated and exempt are different VAT treatments even though both produce zero output tax.
What is tax type D in eTIMS?
Tax type D is the non-VAT treatment commonly used when the seller is not registered for VAT and therefore does not charge VAT on the sale.
What is tax type E in eTIMS?
Tax type E represents reduced-rate VAT at 8%. Use it only for supplies covered by the current reduced-rate provisions.
Can one eTIMS invoice contain different tax types?
Yes. Each item line carries its own tax treatment, so an invoice may contain differently classified supplies when that reflects the actual transaction.
Last reviewed: July 2026. This guide summarizes current public KRA information and is not tax or legal advice. Confirm unusual cases with KRA or a qualified tax professional.