Why credit notes exist in eTIMS
Once an invoice is signed and transmitted, it is part of the record KRA holds. You cannot reach back and change it, because that would undermine the whole point of a verifiable system. Instead, you issue a credit note that references the original invoice and adjusts or reverses it.
A credit note carries its own control number and links to the invoice it corrects. It is what reduces your declared sales and the related VAT when a sale is returned or reduced, so your VAT return reflects what actually happened rather than the original, now-wrong, figure.
There is a debit note too, which is its mirror image. Where a credit note reduces an invoice, a debit note increases it, for example when you undercharged the first time. Both work the same way: they reference the original invoice and adjust it rather than rewriting it, so the trail KRA sees always reconciles.
How to issue an eTIMS credit note
The flow mirrors issuing an invoice, with one extra step linking back to the original.
- 1
Find the original invoice
Locate the transmitted invoice you need to correct, because the credit note must reference it.
- 2
Choose full or partial
Decide whether you are cancelling the whole invoice or only reducing it, for example a partial return of goods.
- 3
Enter the correct amounts
Capture the items and values being credited, including the VAT portion, so the adjustment is accurate.
- 4
Reference the original
Link the credit note to the original invoice number so KRA and your records connect the two.
- 5
Sign and transmit
Submit the credit note so it is signed, gets its own control number, and is transmitted to KRA.
- 6
Give the customer a copy
Provide the customer with the credit note, especially a business buyer who must adjust their own claimed cost.
Credit note mistakes
Trying to edit the original invoice
You cannot change a transmitted invoice. Issue a credit note instead, or your records will not match KRA.
Forgetting to reference the invoice
A credit note that does not link to the original leaves a floating adjustment that is hard to reconcile.
Getting the VAT portion wrong
If you credit the wrong VAT amount, your VAT return will be off. Confirm the VAT inside the credited figure before issuing.
Issuing one for the wrong reason
A credit note reverses a genuine return, overcharge or cancellation. Using one to quietly massage your sales figures is fraud, and because every note is transmitted and linked, it is also easy for KRA to spot.
A return handled correctly
A shop sold goods for KES 5,800 inclusive of VAT, of which KES 800 was VAT. The customer returns half the items, worth KES 2,900 inclusive. The shop cannot edit the original invoice, so it issues a credit note for KES 2,900 referencing that invoice, with KES 400 of VAT credited.
After the credit note, the shop’s declared sales and output VAT drop by exactly the returned amount, and the customer, if a business, reduces their claimed cost to match. You can confirm the KES 400 VAT split with the VAT calculator before issuing, so the credit note is right the first time.
Compare that to the wrong way: refunding the customer in cash and leaving the original KES 5,800 invoice untouched. The shop would then be declaring and paying VAT on goods it no longer sold, and its sales figure would overstate reality. The credit note is what keeps the books honest in both directions.
Trading without eTIMS-compliant tax invoices risks KRA penalties, blocked VAT input claims for your customers, and receipts a business buyer cannot expense.
Veira signs every sale to KRA eTIMS automatically, so each receipt is compliant the moment it prints, with no separate device to reconcile.
Credit notes the easy way
Veira issues compliant credit notes that reference the original invoice automatically, so a return or correction is a few taps rather than a reconciliation headache. The VAT is adjusted correctly and the credit note gets its own control number.
Because every invoice and credit note is captured, your sales and VAT records always reflect what actually happened, which is exactly what protects you if KRA ever reviews your books.
It also keeps the link intact automatically. Each credit note points back to the invoice it adjusts, so you never end up with a floating refund nobody can tie to a sale. Returns become a quick, traceable action rather than a monthly reconciliation puzzle.
Frequently asked questions
What is an eTIMS credit note?
Can I just edit an eTIMS invoice instead?
When do I use a credit note?
Does a credit note affect my VAT return?
Does the customer need the credit note?
Can I issue a partial credit note?
What is the difference between a credit note and a debit note?
How soon should I issue a credit note?
When an invoice is already with KRA, the credit note is your only clean way to fix it, and used correctly it keeps your sales and VAT records honest. Reference the original, credit the right VAT, and hand the customer a copy. Let your till issue compliant credit notes in a few taps. Book a free demo, or confirm any VAT split first with the free calculator.