Technology Polout September 18, 2024 0 Comments

How To Generate E-Invoices (ETR) in Kenya with TIMS

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.