Upwork, a popular freelancing platform in Kenya, has implemented new tax obligations for its freelancers. The Kenyan government now requires Upwork to collect and remit value-added tax (VAT) on services provided through the platform. Freelancers must include their Kenya Revenue Authority (KRA) Personal Identification Number (PIN) on their profiles to comply with the new tax regulations.

The VAT rate in Kenya is set at 16% of the total service cost, which means clients based in Kenya must pay an additional 16% on top of the service cost as VAT to the government. Upwork will deduct the VAT from freelancers' earnings using their KRA PIN, and this information will be recorded by the tax authority. Freelancers must report their earnings to KRA at the end of the financial year, and those filing nil returns will no longer be able to do so.

Temporary residents in Kenya, even if freelancing through Upwork, must pay VAT. However, if they relocate to another country, Upwork will adjust VAT collection according to the prevailing rates in the new country or cease collecting such taxes if there is no VAT or comparable tax there.

Freelancers eligible for VAT exemption must provide a valid tax exemption certificate to Upwork, and once verified, Upwork will stop charging them VAT.

While Upwork has reported the Kenya tax update, it remains uncertain whether other freelancing platforms used for freelance work will also be targeted by the taxman for tax compliance in the future.

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