Kenya – VAT rules: Non-Resident Digital Platform as Deemed Supplier

The VAT for digital service providers in Kenya can be quite complex for potentially responsible parties to understand. There are many contradictory opinions on the scope of liability that non-resident providers of digital services/goods face when supplying to customers who reside in or are established in Kenya. 

The situation becomes even more complex when it comes to the extent of liability that follows non-resident digital platforms, which aren’t merely connecting registered underlying suppliers and domestic customers. This uncertainty, in many cases, means less VAT revenue for revenue authorities. 

The Judgement of the High Court at Nairobi, published on January 16, 2026 (delivered to the parties on October 23, 2025), clarifies many points regarding the application of the deemed supplier concept to digital platform operators. This Court’s decision is a result of the Appeal brought by the Commissioner of Revenue Authority against the Digital Platform operator, which operates a platform that facilitates passenger transport and delivery services. 

The court shed much-needed clarity on the VAT responsibilities of digital platform operators and when they are solely responsible for VAT collection on the underlying supplies. 

The key takeaways are:

The Court followed the EU VAT Directive provisions on the “deemed supplier” or commissionaire rule in relation to the intermediation of digital platform operators in the relevant supply chain. Alongside this, the CJEU decisions on this matter held a substantial relevance for the formulation of the Judgement 

The court clarified that when digital platform operators authorise charging to the customer, authorise delivery of services, or set general terms and conditions for the underlying supplier or customer, they act as a deemed supplier. It is responsible for VAT collection. 

The platform operator’s VAT liability is determined based on the full amount paid by the customer, not just the commission fee deducted from the underlying supplier. 

This judgment, which upheld the Appellant’s position as binding, will surely shed light on the scope of VAT responsibility for both domestic and foreign digital platforms. Platform operators should review their business models to investigate whether they should collect VAT on the full amount or only on fees.