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Partners Worldwide 5 th East Africa Regional Conference 25 to 26 Aug 2011

Partners Worldwide 5 th East Africa Regional Conference 25 to 26 Aug 2011 . Kimani Kimotho Kimani Kimotho & Co Kimanikimotho@gmail.com. Legal and tax matters. Registration & Licensing Contracting Employee issues Returns Taxation Q& A. Should I register ?.

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Partners Worldwide 5 th East Africa Regional Conference 25 to 26 Aug 2011

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  1. Partners Worldwide5th East Africa Regional Conference25 to 26 Aug 2011 Kimani Kimotho Kimani Kimotho & Co Kimanikimotho@gmail.com

  2. Legal and tax matters • Registration & Licensing • Contracting • Employee issues • Returns • Taxation • Q& A

  3. Should I register? • Formalization – a desire by most • Access to finance • Kenya Revenue Authority • Bank account operation

  4. How do I register? • Depends on the desired entity • Get professional help/Do it yourself (all at Sheria House) • Tax registration – online • Licenses depends on activity and Local Authority (SBP etc)

  5. Contracting • Written always better than verbal • Be clear what you do not want • Professional help – before you sign on the dotted line.

  6. Employee issues • Written contract of employment required by law • Mandatory minimums such as Leave, NSSF, NHIF etc • Payment is also protected by law

  7. Employee issues • Disciplinary action should be well recorded • No suspension without pay! • All cases of dismissal can be investigated by the labour offices

  8. Returns • Monthly tax returns e.g. WHT, PAYE & VAT • Annual Tax returns • Annual Company returns

  9. Taxation – Income Tax • All income of a business is liable to tax • “Business” is defined to include any trade, profession or vocation and every manufacture, adventure and concern in the nature of trade • Allowable expenses

  10. Taxation – Income Tax • Characteristics of a business • Commercial character • Profit motive • Number of transactions (sale of land?) • Similar transactions • Time interval

  11. Taxation – Income Tax • Allowable expenses • Expenditure wholly and exclusively incurred in the production of income for that year of income • Non-allowable expenses – the converse? • Obtain help in calculation of income tax

  12. Taxation – WHT & PAYE • Withholding tax on management, professional or training fees, interest, dividends etc. • Pay As You Earn deductions from employees including directors • Collection on behalf of KRA • Stiff penalties • Monthly payments & returns • Annual Returns

  13. Taxation – VAT • Value added Tax is a tax on all taxable supplies • Taxable supplies are all supplies that are not exempt. • Three rates: • 16% (Standard Rate) • 12% (concessionary rate) • 0% (zero rate)

  14. Taxation – VAT • Monthly returns and payments • List of all sales and purchases (include details of suppliers/customers, dates and amounts – Net, VAT and gross of VAT • Non-deductible supplies • Stiff penalties • Professional help/good accountant • Periodic “Health Checks”

  15. Questions and Answers Kimani Kimotho Kimani Kimotho & Co kimanikimotho@gmail.com +254722214322

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