An invoice is a legally significant document in Kenya. For businesses registered for VAT, it is a tax document — the recipient cannot claim input VAT without a valid tax invoice from a VAT-registered supplier. For freelancers and small businesses below the VAT threshold, it is a payment demand that needs to be clear, traceable, and professional — and should always be backed by a signed service contract that sets out the scope and payment terms agreed upon.
Every invoice in Kenya should include: the seller's full name and address, the buyer's full name and address, an invoice number (sequential and unique — essential for your own records and for KRA), the invoice date, a description of the goods or services provided, the unit price and quantity, the total amount, and the payment terms (due date and bank details or M-Pesa number).
If you are VAT-registered: you must issue a tax invoice for every supply above KES 500, include your KRA PIN, the buyer's KRA PIN (for B2B transactions), and show the VAT amount separately. The standard VAT rate in Kenya is 16%. Failure to issue compliant tax invoices is a compliance risk and disallows the recipient's input VAT claim.
If you are not VAT-registered (annual turnover below KES 5 million): your invoices do not need to include VAT. They still need to be clear, sequentially numbered, and retained for at least five years for any KRA audit.
The most common invoicing mistakes by Kenyan freelancers and SMEs: no invoice number (makes tracking and disputes impossible), no due date (clients delay payment without a stated deadline), vague service descriptions ("consulting services" rather than "financial model for Q3 budget — delivered 15 October"), and sending a PDF with no follow-up. For corporate clients it also helps to sign the invoice or agreement electronically before sending, and where the engagement is employment-related, issue a formal offer letter alongside the first invoice.