eTIMS for landlords and property managers: what it means for rent and commission invoices

Since KRA rolled out eTIMS, landlords and agents have been getting the same questions from tenants, accountants and owners: "Can you send an eTIMS invoice?" Many are not sure if the rules apply to them, or what to do if they do. This guide explains eTIMS for landlords and property managers in plain terms, and where it touches rent and commission.

One honest note first: KRA has updated its guidance on eTIMS and rental income more than once. Use this as a map of the questions to ask, and confirm the current position with KRA or a tax adviser before you change how you invoice.

What eTIMS is

eTIMS stands for electronic Tax Invoice Management System. It is KRA's way of making invoices visible to the taxman as they are issued.

When you issue an eTIMS invoice:

• it is created through a KRA-approved system
• it carries details KRA can verify
• KRA receives a copy, so it can match your sales to your tax returns

For the person paying you, an eTIMS invoice is proof of a genuine expense. That is why business customers ask for them.

eTIMS for landlords: who is affected

Think about it in three groups.

Commercial landlords

If you rent shops, offices, warehouses or other business premises, eTIMS is likely to matter to you. Your tenants are businesses, and businesses want valid invoices for their rent so they can claim it as an expense. If you are VAT registered, VAT rules on invoicing also apply.

Residential landlords

Most residential landlords pay tax on rent under the Monthly Rental Income (MRI) regime, a simple tax on gross rent filed each month. Whether these landlords must issue eTIMS invoices for residential rent is the question KRA's guidance has shifted on. Check KRA's current position for your situation.

Even where it is not required, you may still get asked. A company that rents a house for a staff member may want an eTIMS invoice for its own records.

Agencies and property managers

An agency earns money by charging for a service: management fees, letting commission, and sometimes fees for repairs it organises. That income is business income, separate from the landlord's rent. Agencies should expect to issue eTIMS invoices to the landlords they work for.

What it means for rent invoices

If you do need to issue eTIMS invoices for rent, a few practical changes follow:

• Every invoice goes through eTIMS. A handwritten book or a plain spreadsheet invoice is no longer enough on its own.
• Customer details must be right. For business tenants, you will need their correct name and KRA PIN.
• Split what you charge. Rent, service charge, water and parking may be treated differently, so list them as separate lines.
• Mistakes are corrected, not deleted. If an invoice is wrong, you issue a credit note and a new invoice, so the record stays complete.
• Your tax returns must match. What you invoice through eTIMS should line up with the rental income you declare.

What it means for commission invoices

For agencies, the cleanest set-up separates two kinds of money:

Money	Whose income	Invoice
Rent collected from tenants	The landlord's	Rent invoice in the landlord's name
Management fee or commission	The agency's	Agency's own eTIMS invoice to the landlord
Repairs paid on the landlord's behalf	The supplier's	Supplier's invoice, passed on to the landlord

A simple monthly routine for an agency:

1. Collect rent and record it against each unit.
2. Work out the commission on what was actually collected.
3. Issue one eTIMS invoice to each landlord for the commission and fees.
4. Show that invoice on the owner statement, deducted from the rent paid out.

This makes it easy for the landlord to see the fee, and easy for both of you to match figures at tax time.

What it means for your expenses

eTIMS cuts both ways. If you want to deduct costs, such as repairs, security or agency fees, check whether you need eTIMS invoices from your suppliers to back them up. A fundi paid in cash with no invoice may become a cost you cannot claim.

Practical habits:

• Ask regular suppliers (plumbers, electricians, security firms, cleaners) whether they issue eTIMS invoices.
• Keep each invoice with the job it relates to.
• Prefer suppliers who can give proper invoices, especially for large jobs.

Getting your records ready

Whatever your exact obligations turn out to be, the same groundwork helps:

• Know your tax regime. Are you on MRI, filing rental income in an annual return, or VAT registered?
• Keep a clean tenant list with names, units and, for business tenants, KRA PINs.
• Separate charges for rent, service charge, water and other items.
• Separate landlord money from agency money in your books and bank accounts.
• Keep every invoice and receipt linked to the unit and month.
• Talk to a tax adviser if you have commercial tenants or are VAT registered.

Landlords who already run clean, numbered invoices and receipts find eTIMS a small step. Those working from M-Pesa messages and memory find it a large one.

Where to check the current rules

• KRA's website and its eTIMS pages
• KRA's contact centre or your nearest tax service office
• A certified public accountant or tax adviser who works with landlords

Ask them three direct questions: Do I need to issue eTIMS invoices for my rent? Which eTIMS option fits my size? Which of my expenses need eTIMS invoices to be deductible?

See ISHI in action

ISHI is property management software for Kenyan landlords and agencies. It keeps M-Pesa rent collection, invoices and reminders, tenant and owner portals, maintenance and reports in one place, so your rent records are organised and ready for whatever your tax adviser needs.

Book a free demo at www.ishi.digital/contact, call 0116888777 or email hello@ishi.digital.