KRA eTIMS Invoice Guide for Freelancers and Service Providers

Quick answer: KRA eTIMS is Kenya's mandatory electronic tax invoicing system. Every person carrying on business, including freelancers and non-VAT service providers, must issue invoices through eTIMS. Clients cannot deduct expenses without an eTIMS invoice, and from 1 January 2026 KRA validates income tax returns against eTIMS data, so compliant invoices now directly affect your clients' tax bills.

For freelancers, consultants and small service businesses, eTIMS has gone from a VAT tool to something every client asks about. This guide covers who needs it, which eTIMS solution fits, what changed in 2026 and how an eTIMS invoice works in practice. If you invoice foreign clients and need a standard invoice instead, use our free invoice generator, and see our freelancer invoice guide for the basics.

Important: This is general information, not tax advice. KRA issues frequent public notices, so check the latest guidance or speak to a tax agent.

What KRA eTIMS is

eTIMS (Electronic Tax Invoice Management System) is KRA's software-based invoicing platform. It replaced the older hardware Electronic Tax Registers and sits alongside TIMS for businesses using tax control devices. Each invoice generated through eTIMS is recorded by KRA in real time or near real time.

That makes eTIMS a clearance-style system, similar in effect to Mexico's CFDI or Nigeria's MBS. If the concept is new, our e-invoicing guide explains how structured invoices differ from PDFs.

Who must issue eTIMS invoices

The key milestones are:

Date	Change	Source
1 September 2023	All persons carrying on business, including non-VAT registered, must generate and transmit invoices through eTIMS	Finance Act 2023; KRA public notice
1 January 2024	Business expenses not supported by an eTIMS invoice are not deductible	KRA public notice
2024	Tax Procedures (Electronic Tax Invoice) Regulations set the detailed rules and exemptions	Regulations under the Tax Procedures Act
October 2025	eTIMS/TIMS compliance added to Tax Compliance Certificate applications	KRA public notice
1 January 2026	Income tax returns validated against eTIMS, TIMS, withholding and customs data	KRA notice; adviser alerts
31 August 2026	eTIMS integrated with the government IFMIS system for public sector suppliers	KRA public notice

KRA's public notice on onboarding non-VAT taxpayers states the rule plainly: any business expenditure not supported by an eTIMS-generated invoice is not deductible for tax purposes.

In practice, this covers companies, partnerships, sole proprietors, professionals, turnover tax payers and landlords. Salaried employees do not need eTIMS for their employment income.

eTIMS invoice for freelancers and service providers

Freelancers often assume eTIMS is only for shops. It is not. If you design logos, write code, consult, tutor or provide any service as a business, your Kenyan business clients need an eTIMS invoice to deduct what they pay you. Since the 2026 validation started, many procurement teams will not pay without one.

VAT vs non-VAT eTIMS invoices

• Not VAT registered: you issue a non-VAT eTIMS invoice showing your KRA PIN, the client's PIN, the service and the amount, with no VAT.
• VAT registered: once your taxable turnover passes the VAT threshold and you register, you issue VAT eTIMS invoices at the 16% standard rate where applicable. Our guide to VAT invoices explains the general content rules.

What a non-VAT eTIMS invoice shows

A non-VAT eTIMS invoice is simple, but every field matters for validation. Expect it to show your name and KRA PIN, the buyer's name and KRA PIN, the date, a description of each service or item, quantity, unit price and total, and the control details eTIMS adds when it records the invoice. Write descriptions that match your contract, such as "Logo and brand guidelines, phase 1" rather than "services", so your client's finance team can map the invoice to a purchase order without asking you.

Deposits, retainers and milestone billing

Many freelancers take a deposit before starting. The safest approach is to issue an eTIMS invoice for each amount you bill, whether it is a deposit, a milestone or a monthly retainer, so that every payment your client makes is supported by an invoice in KRA's records. If a project is cancelled after a deposit, issue an eTIMS credit note for the unused part rather than simply refunding. Our guides to retainer invoices and milestone payments explain how to structure these arrangements.

In both cases, include the client's KRA PIN. Missing buyer PINs are one of the most common reasons an otherwise genuine invoice fails validation, the same problem we cover in our guide to the tax ID on an invoice.

Choosing an eTIMS solution

KRA offers several eTIMS solutions. Their eTIMS FAQ page describes each one. In summary:

Solution	Best for	Internet needed?
eTIMS Lite (USSD *222#)	Individuals and sole proprietors, low volumes, basic phones	No
eTIMS Lite (web via eCitizen, mobile app)	Freelancers and small non-VAT businesses	Yes
Online portal	Small businesses invoicing from a computer	Yes, stable connection
eTIMS Client	Businesses with steady volumes; works offline and syncs	Can invoice during downtime
OSCU	Fully online businesses integrating an ERP or billing system	Yes, stable connection
VSCU	High-volume or mixed online and offline operations integrating systems	Can invoice during downtime

For a typical freelancer, eTIMS Lite on the web or app is the practical choice. Move to the Client or an integration only when volume grows.

A useful rule of thumb: if you send fewer than a dozen invoices a month and work mostly from your phone, eTIMS Lite is enough. If you invoice daily, run a shop alongside your services, or already use accounting software, look at the eTIMS Client or ask your software provider whether it supports an OSCU or VSCU integration, so invoices are created once and reach KRA automatically. Whichever you choose, test it with a small invoice to a friendly client before you rely on it for a large one, and keep KRA's support contacts handy for onboarding questions.

How to issue an eTIMS invoice: step by step

1. Make sure you have an active KRA PIN with the relevant business obligation.
2. Onboard on eTIMS through the KRA portal or eCitizen and choose your solution.
3. Add your client using their KRA PIN and legal name.
4. Enter the service description, quantity, unit price and tax type (non-VAT, or VAT rate).
5. Generate the invoice; eTIMS records it with KRA and produces the invoice with its control details.
6. Send the eTIMS invoice to the client, with a cover email or statement if you like.
7. Use eTIMS credit notes, not new invoices, to correct mistakes. Our credit note guide explains the logic.

Keep your own sequence for reference numbers and job codes so you can match eTIMS invoices to contracts; an invoice number generator is handy for that.

Reconciling eTIMS with your own tax return

The 2026 validation works in both directions. KRA compares the income in your return with the sales recorded in eTIMS and the withholding tax your clients have declared on payments to you. Adviser alerts describe KRA using the higher of declared income and its data for income, and the lower of declared expenses and eTIMS purchase data for expenses. If your eTIMS sales total 1.5 million shillings but your return shows 1.2 million, expect a question or an automatic adjustment.

A simple monthly routine prevents most problems:

1. Export your eTIMS sales list for the month.
2. Match each invoice to a payment received or an open balance.
3. Check that credit notes are recorded for any cancelled work.
4. Compare withholding certificates from clients with the invoices they relate to.
5. Keep the reconciliation with your records for the return.

On the expense side, ask your own suppliers for eTIMS invoices for software, co-working, equipment and subcontracted work. If a supplier cannot give one, the expense may not be deductible, so factor that into the price you accept.

Government suppliers and the IFMIS link

From 31 August 2026, KRA and the National Treasury integrated eTIMS with IFMIS, the government's financial management system. If you supply services to a ministry, county or state agency, expect payment processing to depend on a matching eTIMS invoice. Make sure the invoice details match the purchase order exactly, because mismatches now surface automatically.

Worked example: a freelancer and a client

Wanjiku is a freelance graphic designer in Nairobi who is not VAT registered. She designs a brand pack for a Nairobi company for 80,000 shillings.

• She issues a non-VAT eTIMS invoice for 80,000 shillings with the company's KRA PIN.
• The company treats the fee as a professional fee and withholds tax at the resident rate of 5%: 80,000 x 0.05 = 4,000 shillings.
• Wanjiku receives 80,000 minus 4,000 = 76,000 shillings, plus a withholding certificate she can credit against her own income tax.

Now look at it from the client's side. Suppose the company's annual return claims 1,200,000 shillings of design and consulting costs, but 200,000 of that came from freelancers who sent only PDF invoices. Under 2026 validation, KRA can use the lower of declared expenses and eTIMS purchase data, so the 200,000 may be disallowed. At Kenya's 30% corporate rate, that is 200,000 x 0.30 = 60,000 shillings of extra tax, before penalties and interest. That is why clients now insist on eTIMS. For the general mechanics of deductions at source, see our explainer on withholding tax on invoices.

Exemptions from eTIMS

Section 23A of the Tax Procedures Act and the 2024 regulations exempt certain transactions from electronic tax invoicing, including:

• Employment income subject to PAYE.
• Imported goods and imported services.
• Core fees of licensed financial institutions and insurers.
• Transactions subject to final withholding tax, such as certain dividends and interest.
• Investment allowance items and airline passenger tickets.
• Internal accounting adjustments that are not supplies.

The imported services exemption matters for foreign freelancers: if you are outside Kenya and bill a Kenyan company, you are generally not expected to use eTIMS. A clear commercial invoice is enough; see our guide to invoicing international clients.

Common eTIMS mistakes to avoid

• Issuing a PDF invoice and promising the eTIMS invoice "later", then forgetting.
• Leaving out the buyer's PIN or using the wrong one.
• Vague descriptions such as "services" that do not match contracts.
• Correcting by issuing a second invoice instead of a credit note, which doubles reported income.
• Not reconciling eTIMS sales with what you declare in your own return; KRA will see both.

Most of these mistakes come from treating eTIMS as an extra step after the real invoice. Flip that around: make the eTIMS invoice the only invoice you issue to Kenyan business clients, and attach any PDF summary, timesheet or statement as supporting material rather than as a separate bill. Your clients get one document to pay against, and your records match KRA's from the start.

Kenya's approach is a preview of where other mandates are going. Our roundup of e-invoicing mandates for 2027 shows how widely data matching is spreading.

Prepare your client invoices

KRA eTIMS is now the backbone of business invoicing in Kenya, and the 2026 validation rules mean your clients will expect an eTIMS invoice every time. Use eTIMS for Kenyan clients, and for quotes, statements or invoices to foreign clients, create a professional document in our free invoice generator with a modern invoice template. When your invoice looks right, download it as a PDF and send it straight to your client.