EXPLAINED: Requirements to Get Tax Exemptions For Cars Bought Abroad by Returning Residents
Annually, individuals from Kenya who have spent extended periods abroad come back to their homeland, with a portion of them opting to make a permanent move.
As anticipated, individuals from this group of Kenyans bring along assets and valuable possessions obtained in other countries.
Many Kenyan nationals often opt to bring their vehicles back when returning home, influenced by factors like convenience, regulatory variations, cost savings, and emotional attachment.
Luckily, the Kenya Revenue Authority (KRA) provides tax exemptions, subject to specific conditions.
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The tax authority categorizes a returning resident as a Kenyan citizen who is moving from a dwelling outside Kenya to a location of their preference within the country.
The Kenya Revenue Authority (KRA) states that individuals coming back to the country are not required to pay Import Duty, Excise Duty, Value Added Tax (VAT), and Import Declaration Form (IDF).
Moreover, the Kenya Revenue Authority (KRA) explicitly declares that individuals falling within this group are eligible for a motor vehicle exemption, provided it is a single motor vehicle being repatriated, with buses and minibusses excluded from this provision.
“The mentioned goods for exemption must be shipped and imported into Kenya within 90 days of the date arrival of the passenger or such further period not exceeding 360 days from such arrival as the Commissioner may allow,” reads part of the regulations.
Gossipa2z outlines the prerequisites that returning residents must fulfill to import their vehicles into Kenya without incurring tax obligations.
Requirements
The candidate is required to provide evidence of ownership and show that the vehicle has been in use for 12 months before its return.
The KRA also indicates that the car should not exceed eight years from its manufacturing date.
Likewise, the candidate is required to provide proof of their travels through a passport or suitable travel documents.
The Kenya Revenue Authority (KRA) also mandates that the person should not have previously benefited from a comparable exemption within the past four years.
The car should be imported into the country within a ninety-day timeframe, or an extended period of up to 360 days, approved by the Commissioner upon the individual resident’s return.
In addition to the stated conditions, an applicant is required to undergo a permanent change of residence for an exemption to be approved.
“A person is accorded an exemption on another motor vehicle once every four years and provided that all the duties on the earlier exempted motor vehicle have been paid for,” KRA specifies.
In the meantime, non-Kenyan citizen spouses may qualify for tax exemption upon their initial arrival, as long as they are arriving to fulfill a task outlined in a contract lasting at least two years.
EXPLAINED: Requirements to Get Tax Exemptions For Cars Bought Abroad by Returning Residents