1. Introduction to ETIMS
The Electronic Tax Invoice Management System (ETIMS) is Kenya Revenue Authority's (KRA) digital platform for generating, storing, and transmitting tax invoices in real-time. Launched to combat tax evasion and streamline compliance, ETIMS has become mandatory for all Kenyan landlords and property managers effective 2024.
For property owners, this means every rent invoice, receipt, and transaction must be processed through ETIMS-compliant systems. Manual receipts or traditional invoicing methods are no longer acceptable and can result in severe penalties.
Key Takeaway: ETIMS isn't optional—it's the law. As of January 2024, KRA requires all rental income transactions to be processed through ETIMS. Non-compliance risks fines, penalties, and even criminal charges.
2. Who Must Register for ETIMS?
If you receive rental income from property in Kenya, you must register for ETIMS. This includes:
- Individual Landlords: Anyone renting out residential or commercial property, regardless of how many units.
- Property Management Companies: Firms managing properties on behalf of owners must register and issue ETIMS invoices for all rental collections.
- Real Estate Developers: Companies renting out unsold units or completed developments.
- Trusts and Estates: Properties held in trust or as part of an estate generating rental income.
- Strata Management (Service Charge): Housing committees and estate managers collecting service charge must also issue ETIMS invoices.
Important: Even if your rental income is below the tax threshold, you must still register for ETIMS and issue e-invoices. KRA uses ETIMS to track all rental transactions, not just taxable ones.
3. Step-by-Step ETIMS Registration Guide
Follow these steps to register for ETIMS and start issuing compliant e-invoices for your rental properties:
Visit the KRA iTax portal (itax.kra.go.ke) and ensure you have a valid Personal Identification Number (PIN). If you don't have one, register as an individual and select "Landlord/Property Owner" as your business category. If you already have a PIN, verify that your contact details, especially email and phone number, are up to date—KRA will send important notifications here.
Login to iTax with your PIN and password. Navigate to the "Registration" menu and select "ETIMS Registration." You'll be presented with the ETIMS application form. Read the terms and conditions carefully—by submitting, you agree to comply with all ETIMS requirements.
Fill in the required information:
- Business Name: Your name as the landlord or your company name
- Business Address: Physical location and postal address
- Business Category: Select "Rental Income/Property"
- Contact Information: Phone and email for ETIMS notifications
- Bank Details: For any refunds or KRA communications
After submitting, KRA will review your application. Approval typically takes 2-5 business days. You'll receive an email and SMS notification once approved. The approval includes your ETIMS credentials and API keys needed to connect third-party systems like Hao PMS.
Once approved, you can integrate Hao PMS with ETIMS for automated compliance. In your Hao dashboard, navigate to Settings → Tax Compliance → ETIMS, and enter your ETIMS credentials. Hao will handle everything else—automatic e-invoice generation, real-time transmission to KRA, and audit trail maintenance.
Pro Tip: Hao PMS customers get priority ETIMS integration support. Our team can help verify your KRA registration and ensure your system is fully compliant within 24 hours.
4. E-Invoicing Requirements for Landlords
Once registered, every rental invoice you issue must meet ETIMS specifications. Here's what compliant e-invoices must include:
| Field | Requirement | Example |
|---|---|---|
| Invoice Number | Unique, sequential, ETIMS-validated | ETIMS/2024/000123 |
| Date of Issue | Actual invoice generation date | 15/03/2024 |
| Supplier Details | Your KRA PIN, name, address | PIN: A000000000X |
| Customer Details | Tenant name, KRA PIN (if business) | John Doe |
| Description | Property address, unit, rental period | Rent for Apt 3B, Sunshine Court, March 2024 |
| Amount | Rent amount in KES | KES 45,000 |
| VAT (if applicable) | VAT amount and rate | VAT 16%: KES 7,200 |
| QR Code | KRA-validated QR code for verification | [QR Code] |
All e-invoices must be transmitted to KRA in real-time—within 24 hours of issuance. Hao PMS automates this process, ensuring every invoice is submitted instantly and stored in KRA's central system.
5. ETIMS Deadlines & Filing Schedule
Understanding ETIMS deadlines is crucial for maintaining compliance. Here's what you need to file and when:
| Filing Requirement | Deadline | Details |
|---|---|---|
| Monthly Rental Income Returns | 20th of following month | Summary of all rental income for the previous month |
| E-Invoice Transmission | Within 24 hours of issuance | Each invoice must be sent to KRA immediately |
| VAT Returns (if registered) | 20th of following month | Monthly VAT-3 return for VAT-registered landlords |
| Annual Rental Income Tax | 30th June each year | Annual return for all rental income |
Hao PMS automatically tracks these deadlines and sends reminders. Our system also generates all required returns with one click, pulling data directly from your rental transactions.
6. Penalties for Non-Compliance
KRA takes ETIMS compliance seriously. Failure to comply can result in severe penalties:
| Violation | Penalty | Additional Consequences |
|---|---|---|
| Failure to register for ETIMS | KES 100,000 or 200% of tax due | Criminal prosecution possible |
| Late filing of returns | KES 2,000 per month or 5% of tax due | Whichever is higher |
| Issuing non-ETIMS invoices | KES 50,000 per invoice | Plus 200% of tax evaded |
| Failure to transmit e-invoices | KES 25,000 per invoice | System access may be suspended |
| Under-declaring rental income | 200% of tax underpaid | Up to 3 years imprisonment |
Real Consequence: In 2023, KRA prosecuted 47 landlords for ETIMS non-compliance, with fines totaling KES 23 million and three landlords receiving prison sentences. Don't become a statistic.
7. VAT on Rental Income: What Landlords Must Know
VAT treatment depends on your property type and annual turnover:
Residential Properties
Residential rent is exempt from VAT. You don't charge VAT to tenants, and you can't claim VAT input credits on expenses related to residential properties. However, you must still issue ETIMS invoices showing "VAT Exempt."
Commercial Properties
Commercial property rent is subject to VAT at 16% if your annual rental income exceeds KES 8 million. Once you cross this threshold, you must:
- Register for VAT with KRA
- Charge 16% VAT on all commercial rent invoices
- File monthly VAT returns (VAT-3) by the 20th of each month
- Remit VAT collected to KRA
- You can claim input VAT on commercial property expenses
Hao PMS automatically tracks your turnover, alerts you when you approach the VAT threshold, and handles all VAT calculations and filings.
8. Automating ETIMS Compliance with Hao PMS
Manual ETIMS compliance is time-consuming and error-prone. Hao PMS automates the entire process:
Hao PMS customers save an average of 12 hours per month on tax compliance and have a 0% non-compliance rate with KRA since 2022.
9. Frequently Asked Questions
Do I need ETIMS if my tenant pays in cash?
Yes. All rental payments must be documented with an ETIMS e-invoice, regardless of payment method. Cash payments must still be recorded in the system, and an e-invoice issued to the tenant.
What if I have multiple properties?
You can manage all properties under one ETIMS registration. Hao PMS lets you organize properties by location, unit, or tenant while maintaining a single compliance profile with KRA.
Can I issue invoices for past months?
Yes, but they must be marked as historical invoices. Hao PMS can generate backdated e-invoices for previous rental periods if needed.
What happens if I make a mistake on an invoice?
ETIMS requires you to issue a credit note for the incorrect invoice and generate a new corrected invoice. Hao PMS automates this process with a single click.
Do service charges for estates need ETIMS invoices?
Yes. If you collect service charges or maintenance fees from tenants, these must also be processed through ETIMS as they constitute taxable transactions.
10. ETIMS Compliance Checklist
Use this checklist to ensure you're fully compliant with KRA ETIMS requirements:
With Hao PMS, all checklist items are automatically handled. You can be 100% confident in your ETIMS compliance.