This article has come through the experience of one of our clients while undergoing clearance of a vehicle which had all the signs of duty exemption except one based on how the law is interpreted.
Furthermore, this article is dedicated to the good KRA Officers who are out there and willing to assist and explain the law. We salute you, please keep helping ordinary citizens.
The law currently states that a returning resident is exempted from taxes if the officer in charge is satisfied that they meet the following criteria:-
Requirement 1:
The person is changing residence from a place outside Kenya to Kenya and must be at least 18 years old.
Therefore,
The original passport of the importer will be required and this will be thoroughly checked to ensure that they are indeed changing residence – more proof may be asked for this and furthermore the age of the importer is verified to be over 18.
Note the processing officer is expected to verify supporting documents (e.g. passports, works permits etc.) and be satisfied the importer is bona fide changing residence and has not been away from the country merely on temporary non-resident visit.
Requirement 2:
The individual must have owned and used the motor vehicle outside Kenya for at least twelve months
Therefore,
The UK V5 must be clear and show that the vehicle was acquired by the importer and owned for 365 days excluding the shipment period. Purchase invoice documents, insurance documents as well as any documentary evidence is always welcome.
The tricky part is “used” the motor vehicle for at least twelve months – this is where our client was caught out. Determining usage is difficult, and therefore the interpretation is that having acquired the motor vehicle, the importer must have been present in the country from which he/she is importing the vehicle for at least 365 days on aggregate prior to shipment of the vehicle. This is easily demonstrated via the importer’s original passport.
It is assumed that during his/her stay, the person was personally using the vehicle in that country. Note this does not mean the importer must not have traveled to other countries. The number of visits the person makes back home prior to the importation is also not important. The requirement is that the days spent in the exporting country must be at least 365 on aggregate (not continuous) since acquiring the vehicle. If the aggregate period is found to be less than twelve (12) months, then the motor vehicle does not qualify.
Requirement 3:
The vehicle should arrive within 90 days of the owner’s arrival
Therefore,
Please check with us on the best vessel to choose. We have frequent sailings, and can ensure the arrival meets your requirement.
Documentation Requirements and Other Notes
It is important that you are available during the clearance period, should the KRA officer require any clarification.
It is also important that you have the following:-
- KRA PIN – Without this no import documents can be lodged
- Original UK V5 (Logbook)
- Original Bill of Lading – Auto Kenya will issue this once the vehicle has been shipped
- Pre-Shipment Inspection Certificate from QISJ: We arrange the pre-shipment inspection via our Tilbury Port
- Original Passport and Older Passports if needed
You can further read more about the exemptions via the Fifth Schedule (The Exemptions Regime).
Of course we always recommend speaking to your clearing agent as laws and interpretations do change from time to time.