Kenya’s Tax Invoice Management System (TIMS) has revolutionized e-invoicing for VAT-registered businesses.
eTIMS software provides taxpayers with options for a simple, convenient and flexible approach to electronic invoicing.
Taxpayers can access eTIMS on various computing devices, including computers, laptops, tablets, smartphones, and Personal Digital Assistants (PDAs).
Understanding the Key Components
The e-invoicing system in Kenya comprises three primary components:
ERP/Business Software: Generates the initial sales invoice data.
Control Unit (Type C): Validates invoice data, assigns a unique invoice number and QR code, and transmits the invoice to KRA.
KRA Portal (iTax): Receives, verifies, and stores e-invoice data for tax purposes.
Configuring Your ETR for TIMS
Ensure ERP Compliance: Verify that your existing ERP or accounting software is compatible with TIMS regulations.
Confirm Integration Capabilities: Check if your software can seamlessly integrate with a TIMS-compliant ETR.
Acquire a Compliant ETR: Purchase a Type C ETR from a KRA-approved supplier.
Configure and Activate: Integrate the ETR with your software. The device will be automatically activated through iTax upon successful configuration.
Acknowledge ETR Assignment: Respond to the confirmation email from iTax to finalize the ETR activation process.
eTIMS ensures efficient invoice issuance and compliance with Kenya’s tax regulations.
Here’s how to get started With e-TIMS:
- Head over to the eTIMS Taxpayer Portal: Simply visit https://www.kra.go.ke/online-services/etims to open the eTIMS portal.
- Sign Up with Your KRA PIN: Click the “Sign Up” button and enter your valid KRA PIN.
- Verify Your Identity: You’ll receive a One-Time Password (OTP) to your registered mobile number. Enter the OTP to proceed.
- Create Your Login Credentials: Set a secure password for your eTIMS account.
- Log In and Select Your eTIMS Solution: Use your KRA PIN and newly created password to log in. Click “Service Request” and choose your preferred eTIMS software solution under “eTIMS Type.”
- Submit Required Documents: Attach a scanned copy of the National ID for:
- Directors (Companies)
- Partners (Partnerships)
- Business Owner (Sole Proprietorships)
- Additionally, upload the completed eTIMS Acknowledgement & Commitment Form (available on the KRA website under Publications > eTIMS).
- Application Review: Submit your application and an authorized KRA officer will review it for approval.
- Install and Configure eTIMS: Once approved, download and install the eTIMS software on your chosen device.
- Self-Installation: Refer to KRA website “User Guides” or “How to Videos” on the KRA YouTube channel for detailed instructions.
- Get Assistance: Alternatively, visit your nearest KRA office for installation support.
Generating E-Invoices on TIMS
Record Sales Invoice: Create the sales invoice in your ERP or accounting software.
Data Transfer to Control Unit: The software automatically transmits invoice details to the connected control unit.
Validation and Signing: The control unit verifies the invoice data, calculates taxes, assigns a unique invoice number and QR code, and digitally signs the invoice.
Invoice Printing: The supplier prints the invoice, which now includes the QR code, control unit invoice number, and serial number.
How To Generate E-Invoices (ETR)
- Log in to your eCitizen eTIMS account.
- Create or Select Customer:
- Navigate to the “Sales” section.
- Click on “Invoice.”
- Determine if the transaction is B2B or B2C.
- Upload your logo (optional).
- Create a new customer or select an existing one.
- Add Customer Details:
- If using an existing KRA PIN, the customer details will appear.
- Click “Add” to include the customer in your list.
- Confirm Tax Type and Add Note:
- Verify that the tax type is “D” (Non-VAT).
- Add a note (optional).
- Input the due date.
- Add Items to Invoice:
- Click “Add Item.”
- Enter item details: product/service, description, unit cost, and quantity.
- Click “Add.”
- Review Invoice Summary:
- Confirm that the item details are accurate.
- Include Terms and Conditions:
- Add any terms and conditions.
- Select the payment method.
- Save or Send Invoice:
- Click “Save” to download the invoice.
- Click “Save and Send” to email the invoice to your client.
Components of the E-invoicing System: A Detailed Look
1. ERP/Business Software
Upgrade Your ETR: Ensure your existing ETR is compatible with TIMS. If not, purchase a compliant Type C ETR from a KRA-approved supplier.
Integration is Key: Seamless integration between your ERP and the ETR is essential for automated invoice transmission.
Activation Process: Once the ETR is configured, it will be automatically activated through iTax. Acknowledge the confirmation email to complete the activation.
Real-time Transmission: The activated ETR transmits e-invoices to KRA in real-time or near real-time whenever a sale is recorded.
2. Control Unit
Validation and Authentication: The control unit acts as a gatekeeper, verifying the accuracy of invoice data and tax computations.
Unique Identifiers: It assigns a unique control unit invoice number and QR code to each invoice for tracking and verification purposes.
Buyer PIN Verification: The control unit also validates the buyer’s PIN, ensuring accurate input tax claims.
Data Transmission to TIMS: Validated invoices are transmitted securely to the TIMS platform for storage and processing.
3. KRA (iTax Portal)
Verification and Authentication: KRA’s iTax portal verifies the control unit invoice number and ensures the accuracy of tax details on the e-invoice.
Tax Invoice Number Checker: The portal provides a tool for taxpayers to verify the validity of e-invoices using the control unit invoice number.
Data Storage and Analysis: TIMS stores e-invoice data, enabling KRA to monitor tax compliance and perform data analysis for revenue management purposes.
Understanding the e-invoicing process with TIMS can help Kenyan businesses ensure seamless compliance, reduce errors, and optimize their tax management processes.
