Which country's tax applies to a client
How Achekam decides which country's tax rules apply to each client of a firm with clients in several countries, and who approves an override.
By Achekam · · 4 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
A Johannesburg firm takes on a Nairobi subsidiary of one of its clients. A Lagos practice starts doing the books for a Kenyan company owned by a Nigerian group. A Nairobi firm services a company incorporated in Nigeria but run from Kenya. In each case, the same question comes up: whose tax rules apply?
Getting it wrong is easy in software that assumes every client lives where the firm does. VAT at the wrong rate, a return for the wrong authority, a deadline from the wrong calendar. This article explains how Achekam decides which country's rules apply to each client, where that decision is recorded, who may override it, and how a firm with clients in several countries should set itself up.
Where the client is, not where the firm is
Achekam taxes a client where the client is, by its country of incorporation or tax residence, not where the firm is. A South African firm's Kenyan client is a Kenyan taxpayer in Achekam, and a Nigerian firm's South African client is a South African one.
That is the right default, because tax follows the taxpayer. It also means the client's own record has to be accurate. A client entered with the wrong country will be taxed by the wrong rules, however carefully the firm works afterwards.
Keep the distinction with the firm's own documents clear. When the firm issues its own invoice, Achekam takes the standard VAT rate from the approved rule in force on the document's date in the issuing workspace's country, and refuses rather than assumes a rate when no approved rule applies. The firm's invoices follow the firm's country; the client's tax work follows the client's.
The client's Jurisdiction section
Each client's profile has a Jurisdiction section holding the client's own country and identifiers. That section is what drives the tax treatment, so treat it as part of client acceptance, not as an afterthought.
At onboarding, confirm and record:
- The country of incorporation, from the registration document.
- The country of tax residence, where it differs, with the basis for that view.
- The client's tax identifiers for that country.
- Any second country where the client has a tax presence.
For each Nigerian or Kenyan engagement, Achekam also shows the governing basis: the regulator, the standards, the reporting framework, the company law and the tax authority. Read it at planning. If the basis shown does not match what the team expects, the Jurisdiction section is usually where the error lies.
Overrides decided by a different person
Residence is not always obvious. A company incorporated in one country may be managed and controlled from another, and its tax residence may then be disputed or require a judgement. For those cases, a jurisdiction override can be recorded, and it is decided by a different person from the one who proposed it.
That two-person rule is sensible because an override changes everything downstream: the rules, the returns, the authority. Use it with care:
- Write down why the override is proposed, with the facts relied on.
- Have a partner with knowledge of both countries decide it.
- Revisit it each year, because the facts behind residence change.
Residence decisions are a matter of law in each country, and the authorities' own guidance is where they start. The NRS page on company income tax sets out, for example, which resident and non-resident companies must file a Nigerian self-assessment return and what the return must contain.
No tax profile without a pack
Achekam has country packs for South Africa, Nigeria and Kenya. It creates no Nigerian or Kenyan tax profile for a client in a country without a pack. A client based in a country Achekam does not cover will not get a profile for one of the covered countries by mistake; its tax work stays outside the system.
On the firm's side, a workspace with no jurisdiction recorded is treated as South African, and a firm outside South Africa, Nigeria and Kenya can sign up but is governed by the South African pack, as the sign-up form says. The Nigeria and Kenya build does not change how South African firms are handled.
A firm can set its practice country to Nigeria or Kenya, work through that country's set-up steps and activate the pack from Settings. Only a Partner or Admin can activate a pack, and activation shows each effect as done, not available yet or failed. Setting up a firm's Nigeria or Kenya pack walks through it.
| Firm | Client | Tax rules applied to the client |
|---|---|---|
| South African | Kenyan company | Kenyan |
| Nigerian | South African company | South African |
| Kenyan | Company in a country with no pack | None in Achekam; work it outside |
Firms with clients in several countries
A few habits keep a multi-country client list in order:
- Run a report of clients by country each quarter and check the odd ones out.
- Assign each foreign-country client to someone who knows that country's rules, and record who.
- Keep each country's deadlines in that country's calendar, not the firm's.
- Recheck residence for any client whose management or ownership has moved.
How returns are then prepared, reviewed and approved for Nigerian and Kenyan clients is covered in the Nigerian and Kenyan tax return workflow. Some clients' taxes will not be computed whatever their country; see client taxes Achekam will not compute.
Start with the list
Pull your client list by country this week and look for clients whose recorded country does not match what you know about them. Correct the Jurisdiction section for each, and route any residence question that needs judgement to a partner for an override decision.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
