VALUE ADDED TAX ACT.

(a) “application to own use”, in relation to goods or services, means applying the goods or services to personal use including personal use by a relative or any other nonbusiness use;

(aa) “biodegradable packaging material” means packaging material which can undergo a breakdown of its entire composition and by naturally existing micro organisms in the presence of air and water at specific temperatures into smaller constituent components within a given time of usually not more than six months;

(b) “Commissioner General” means the Commissioner General of the Uganda Revenue Authority;

(c) “company” means a body corporate or unincorporate, whether created or recognised under a law in force in Uganda or elsewhere, but does not include a partnership or trust;

(d) “consideration”, in relation to a supply of goods or services, means the total amount in money or kind paid or payable for the supply by any person, directly or indirectly, including any duties, levies, fees and charges paid or payable on, or by reason of, the supply other than tax, reduced by any discounts or rebates allowed and accounted for at the time of the supply;

(da) “contractor” means a person supplying goods or services other than as an employee to the following—

(i) a licensee in respect of mining operations undertaken by the licensee; or

(ii) a licensee in respect of petroleum operations undertaken by the licensee;

(e) “exempt import” has the meaning in section 20;

(f) “exempt supply” means a supply of goods or services to which section 19 applies;

(g) “finance lease”, in relation to goods, includes the lease of goods where—

(i) the lease term exceeds 75 percent of the expected life of the goods;

(ii) the lessee has an option to purchase the goods for a fixed or determinable price at the expiration of the lease; or

(iii) the estimated residual value of the goods to the lessor at the expiration of the lease term, including the period of any option to renew, is less than 20 percent of its fair market value at the commencement of the lease;

(h) “goods” includes all kinds of movable and immovable property, but does not include money;

(i) “hire-purchase agreement” means an agreement that is a hire-purchase agreement in terms of hire-purchase law in Uganda;

(j) “import” means to bring, or to cause to be brought, into Uganda from a foreign country or place;

(k) “importer”, in relation to an import of goods, includes the person who owns the goods, or any other person for the time being possessed of or beneficially interested in the goods and, in relation to goods imported by means of a pipeline, includes the person who owns the pipeline;

(l) “input tax” means the tax paid or payable in respect of a taxable supply to or an import of goods or services by a taxable person;

(la) “licensee” means a person granted a mining right or a person with whom the Government has entered into a petroleum agreement;

(lb) “mining operations” includes every method or process by which any mineral is won from the soil or from any substance or constituent of the soil and includes mining exploration operations;

(lc) “petroleum operations” means an authorised operation under a petroleum agreement for petroleum exploration, development, production, and export including, planning, installation, transportation of petroleum, storage or decommissioning, and for the construction of a pipeline or petroleum refinery;

(ld) “petroleum agreement” means an agreement entered into, by the Government of Uganda with another person in accordance with the Petroleum (Exploration, Development and Production) Act or the Petroleum (Refinery, Conversion, Transmission and Midstream Storage) Act;

(m) “Minister” means the Minister responsible for finance;

(n) “money” includes—

(i) coins or paper currency that the Bank of Uganda has issued as legal tender;

(ii) coins or paper currency of a foreign country which is used or circulated as currency;

(iii) a bill of exchange, promissory note, bank draft, postal order, or money order, other than a coin or paper currency that is a collector’s piece, investment article or an item of numismatic interest;

(o) “output tax” means the tax chargeable under section 4 in respect of a taxable supply;

(p) “person” includes an individual, a partnership, company, trust, government and any public or local authority;

(q) “public international organisation” means an organisation listed in the First Schedule to this Act;

(r) “reduced consideration” has the meaning in section 18(7);

(s) “relative”, in relation to an individual, includes an ancestor of the individual, a descendant of the individual’s grandparents or the spouse of the individual or of any of the foregoing;

(t) “services” means anything that is not goods or money;

(u) “tax” means the value added tax chargeable under this Act;

(v) “tax fraction” means the fraction calculated in accordance with the formula—

r
r + 100

in which formula “r” is the rate of tax applicable to the taxable supply;

(w) “tax period” means the calendar month;

(x) “taxable person” has the meaning in section 6;

(y) “taxable supply” has the meaning in section 18;

(z) “taxable transaction” means a taxable supply or an import of goods or services that is subject to tax under this Act;

(aa) “taxable value”, in relation to a taxable supply or an import of goods or services is determined under Part VI of this Act;

(bb) “trust” means any relationship where property is under the control or management of a trustee;

(cc) “trustee” includes—

(i) an executor, administrator, tutor or curator;

(ii) a liquidator or judicial manager;

(iii) a person having or taking on the administration or control of property subject to another person having a beneficial interest in the property;

(iv) a person acting in a fiduciary capacity;

(v) a person having possession, control or management of the property of a person under a legal disability.

2. Interpretation of fair market value.

(1) For the purposes of this Act, the fair market value of a taxable supply at any date is the consideration in money which a similar supply would generally fetch if supplied in similar circumstances at that date in Uganda, being a supply freely offered and made between persons who are not associates.

(2) Where the fair market value of a taxable supply cannot be determined under subsection (1), the fair market value of the supply shall be the amount that, in the opinion of the Commissioner General having regard to all the circumstances of the supply, is the fair market value of the supply.

(3) In this section, “similar supply”, in relation to a taxable supply, means a supply that is identical to, or closely or substantially resembles, the taxable supply, having regard to the characteristics, quality, quantity supplied, functional components, reputation of, and materials comprising the goods and services which are the subject of the taxable supply.

3. Interpretation of associate.

(1) For the purposes of this Act, “associate”, in relation to a person, means any other person who acts or is likely to act in accordance with the directions, requests, suggestions or wishes of the person whether or not they are communicated to that other person.

(2) Without limiting the generality of subsection (1), the following are treated as an associate of a person—

(a) a relative;

(b) a partner, an associate of a partner under another application of this section or a partnership in which the person is a partner;

(c) the trustee of a trust under which the person, or an associate under another application of this section, benefits or is capable of benefiting;

(d) a company in which the person either alone or together with an associate or associates under another application of this section controls directly or indirectly 50 percent or more of the voting power in the company, or which is accustomed or may reasonably be expected to act in accordance with the directions or wishes of the person or an associate of the person;

(e) where the person is a partnership, a partner in the partnership, an associate of the partner under another application of this section or another partnership in which the person or an associate is a partner;

(f) where the person is the trustee of a trust, any other person or an associate of such other person under another application of this section who benefits or is capable of benefiting under the trust; or

(g) where the person is a company, a person who either alone or together with an associate or associates under another application of this section controls directly or indirectly 50 percent or more of the voting power of the company, or in accordance with whose directions or wishes the company is accustomed or may reasonably be expected to act.

PART II
CHARGE OF TAX.

4. Charge of tax.

A tax, to be known as a value added tax, shall be charged in accordance with this Act on—

(a) every taxable supply made by a taxable person;

(b) every import of goods other than an exempt import; and

5. Person liable to pay tax.

Except as otherwise provided in this Act, the tax payable—

(a) in the case of a taxable supply, is to be paid by the taxable person making the supply;

(b) in the case of an import of goods, is to be paid by the importer;

(c) in the case of a supply of imported services, other than an exempt service, is to be paid by the person receiving the supply.

PART III
TAXABLE PERSONS.

6. Taxable person.

(1) A person registered under section 7 is a taxable person from the time the registration takes effect.

(2) A person who is not registered but who is required to be registered or to pay tax under this Act, is a taxable person from the beginning of the tax period immediately following the period in which the duty to apply for registration or to pay tax arose.

7. Persons required or permitted to register.

(1) A person who is not already a registered person shall apply to be registered in accordance with section 8—

(a) within 20 days of the end of any period of three calendar months if during that period the person made taxable supplies, the value of which exclusive of any tax exceeded one quarter of the annual registration threshold set out in subsection (2); or

(b) at the beginning of any period of three calendar months where there are reasonable grounds to expect that the total value exclusive of any tax of taxable supplies to be made by the person during that period will exceed one quarter of the annual registration threshold set out in subsection (2).

(2) The annual registration threshold is 150 million shillings.

(3) In determining whether the registration threshold is exceeded for the period specified in subsection (1), it is to be assumed that the person is a taxable person during that period.

(4) A person supplying goods or services for consideration as part of his or her business activities, but who is not required by subsection (1) or (5) to apply for registration, may apply to the Commissioner General to be registered in accordance with section 8.

(4A) Notwithstanding subsection (4), the following persons may apply to the Commissioner General to be registered in accordance with section 8—

(a) a license undertaking mining or petroleum operations;

(b) a person undertaking the construction of a petroleum refinery or petroleum pipeline; and

(5) Notwithstanding subsection (1), a person being a national, regional, local or public authority or body which carries on business activities shall apply for registration at the date of commencement of those activities.

(6) …

8. Registration.

(1) An application for registration under section 7 shall be in the form prescribed by the Commissioner General, and the applicant shall provide the Commissioner General with such information as the Commissioner General may require.

(2) The Commissioner General shall register a person who applies for registration under section 7 and issue to that person a certificate of registration including the VAT registration number unless the Commissioner General is satisfied that that person is not eligible for registration under this Act or, in the case of an application under section 7(4)—

(a) the person has no fixed place of abode or business; or

(b) the Commissioner General has reasonable grounds to believe that that person—

(i) will not keep proper accounting records relating to any business activity carried on by that person;

(ii) will not submit regular and reliable tax returns as required by section 31; or

(iii) is not a fit and proper person to be registered.

(3) Registration under this section takes effect—

(a) in the case of an application under subsection (1), (5) or (6) of section 7, from the beginning of the tax period immediately following the period in which the duty to apply for registration arose; or

(b) in the case of an application under section 7(4), from the beginning of the tax period immediately following the period in which the person applied for registration.

(4) A certificate of registration shall state the name and other relevant details of the taxable person, the date on which the registration takes effect, and the taxpayer identification number.

(5) The Commissioner General shall establish and maintain a register containing the relevant details of all taxable persons.

(6) The Commissioner General may register a person if there are reasonable grounds for believing that the person is required to apply for registration under section 7 but has failed to do so, and that registration shall take effect from the date specified in the certificate of registration.

(7) The Commissioner General shall serve a notice in writing on a person of the decision to refuse to register the person under subsection (2) within one month of receiving the application.

(8) The Commissioner General shall serve a notice in writing on a person of a decision to register the person under subsection (6) within one month of making the decision.

(9) A person dissatisfied with a decision made under subsection (8) may only challenge the decision under Part VIII of this Act on the basis that the decision is an assessment.

(10) A taxable person shall notify the Commissioner General in writing of any change—

(a) in the name or address of that person;

(b) in circumstances where the person no longer satisfies the grounds for registration; or

and the notification shall be made within 14 days after the change has occurred.

9. Cancellation of registration.

(1) A taxable person shall apply in writing for the cancellation of the registration if that person has ceased to make supplies of goods or services for consideration as part of the business activities of the person.

(2) Subject to subsection (3), a taxable person may apply in writing to have his or her registration cancelled if, with respect to the most recent period of three calendar months, the value of his or her taxable supplies exclusive of tax does not exceed one quarter of the annual registration threshold specified under section 7(2) and if the value of his or her taxable supplies exclusive of tax for the previous 12 calendar months does not exceed 75 percent of the annual registration threshold.

(3) In the case of a taxable person who applied for registration under section 7(4), an application under subsection (2) may only be made after the expiration of two years from the date of registration.

(4) The Commissioner General may cancel the registration of—

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) a person who has applied for cancellation under subsection (1) or (2); or

(b) a person who has not applied for cancellation of registration but in respect of whom the Commissioner General is satisfied that he or she is neither required nor entitled under section 7 to apply for registration.

(5) The Commissioner General may cancel the registration of a person who is not required to apply for registration under section 7 where the person—

(a) has no fixed place of abode or business;

(b) has not kept proper accounting records relating to any business activity carried on by him or her;

(d) is not, in the opinion of the Commissioner General, a fit and proper person to be registered.

(6) The Commissioner General shall serve a notice in writing on a taxable person of a decision to cancel or refuse to cancel the registration under this section within 14 days of making the decision.

(7) The cancellation of registration shall take effect from the end of the tax period in which the registration is cancelled.

(8) Where the registration of a person is cancelled, the Commissioner General shall remove that person’s name and the details described in section 8 from the register.

(9) A taxable person whose registration has been cancelled under this section shall be regarded as having made a taxable supply of all goods on hand (including capital goods) and shall be liable for output tax, at the time the registration is cancelled, on all goods in respect of which he or she received input tax credit, the output tax payable being based on the fair market value of the goods at the time his or her registration was cancelled.

(10) The obligations and liabilities of a person under this Act, including the lodging of returns required under section 31, in respect of anything done or omitted to be done by that person while a taxable person shall not be affected by cancellation of the person’s registration.

PART IV
SUPPLIES OF GOODS AND SERVICES.

10. Supply of goods.

(1) Except as otherwise provided under this Act, a supply of goods means any arrangement under which the owner of the goods, parts or will part with possession of the goods, including a lease or an agreement of sale or purchase.

(2) …

(3) The application of goods to own use is a supply of the goods.

11. Supply of services.

(1) Except as otherwise provided under this Act, a supply of services means any supply which is not a supply of goods or money, including—

(a) the performance of services for another person;

(b) the making available of any facility or advantage;

(d) the provision of thermal and electrical energy, heating, gas, refrigeration, air conditioning and water.

(2) A supply of services made by an employee to an employer by reason of employment is not a supply made by the employee.

12. Mixed supplies.

(1) A supply of services incidental to the supply of goods is part of the supply of goods.

(2) A supply of goods incidental to the supply of services is part of the supply of services.

(3) A supply of services incidental to the import of goods is part of the import of goods.

(4) Regulations made under section 78 may provide that a supply is a supply of goods or services.

13. Supply by agent.

(1) A supply of goods or services made by a person as agent for another person being the principal is a supply by the principal.

(2) Subsection (1) does not apply to an agent’s supply of services as agent to the principal.

14. Time of supply.

(1) Except as otherwise provided under this Act, a supply of goods or services occurs—

(a) where the goods are applied to own use, on the date on which the goods or services are first applied to own use;

(b) where the goods or services are supplied by way of gift, on the date on which ownership in the goods passes or the performance of the services is completed; or

(i) the goods are delivered or made available or the performance of the service is completed;

(ii) payment for the goods or services is made; or

(iii) a tax invoice is issued.

(2) Where—

(a) goods are supplied under a rental agreement; or

(b) goods or services are supplied under an agreement or law which provides for periodic payments,

the goods or services are treated as successively supplied for successive parts of the period of the agreement or as determined by that law, and each successive supply occurs on the earlier of the date on which payment is due or received.

(3) For the purposes of this section, where two or more payments are made or are to be made for a supply of goods or services other than a supply to which subsection (2) applies, each payment shall be regarded as made for a separate supply to the extent of the amount of the payment on the earlier of the date the payment is due or received.

(4) A person making a supply to which subsection (1)(a) or (b) applies shall keep a record of the date on which the supply occurred as determined under this section.

(5) In this section, “rental agreement” means any agreement for the letting of goods, including a hire-purchase agreement or finance lease.

15. Place of supply of goods.

A supply of goods shall take place in Uganda if the goods are delivered or made available in Uganda by the supplier or if the delivery or making available involves transportation, the goods are in Uganda when the transportation commences.

16. Place of supply of services.

(1) A supply of services shall take place in Uganda if the business of the supplier from which the services are supplied is in Uganda.

(2) Notwithstanding subsection (1), a supply of services shall take place in Uganda if the recipient of the supply is not a taxable person and—

(a) the services are physically performed in Uganda by a person who is in Uganda at the time of the supply;

(b) the services are in connection with immovable property in Uganda;

(d) the services are electronic services delivered to a person in Uganda at the time of supply;

(e) the supply is a transfer, assignment or grant of a right to use a copyright, patent, trademark or similar right in Uganda; or

(f) the services are telecommunication services initiated by a person in Uganda, other than a supply initiated by—

(i) a supplier of telecommunications services; or

(ii) a person who is roaming while temporarily in Uganda.

(3) For the purposes of subsection (2)(f), the person who initiates a supply of telecommunications services shall be the person who first does any of the following—

(a) the person who—

(i) controls the commencement of the supply;

(ii) pays for the services;

(iii) contracts for the supply; or

(b) the person to whom the invoice for the supply is sent.

(4) Where the supplier of a telecommunications service cannot identify any of the persons referred to in subsection (3) because it is impractical to determine the physical location of a person due to the type of service or to the class of customer to which the person belongs, the supplier shall, in respect of all supplies of telecommunications services made for that type of service or that class of customer, treat the supply as being made where the physical residence or business address for the person receiving invoices from the supplier is located.

(5) In this section—

(a) “electronic services” means any of the following, when provided or delivered on or through a telecommunications network—

(i) websites, webhosting or remote maintenance of programs and equipment;

(ii) software and the updating of software;

(iii) images, text and information;

(iv) access to databases;

(v) self education packages;

(vi) music, films and games including games of chance; or

(vii) political, cultural, artistic, sporting, scientific and other broadcasts and events including television;and

(b) “telecommunications services” means the transmission, emission, or reception of signals, writing, images, sounds, or information of any kind by wire, radio, optical, or other electromagnetic systems and includes—

(i) the related transfer or assignment of the right to use capacity for such transmission, emission, or reception; and

(ii) the provision of access to global or local information networks,

but does not include the supply of the underlying writing, images, sounds, or information.

17. Imports.

An import of goods takes place—

(a) where customs duty is payable, on the date on which the duty is payable; or

(b) in any other case, on the date the goods are brought into Uganda.

PART V
TAXABLE SUPPLIES.

18. Taxable supply.

(1) A taxable supply is a supply of goods or services, other than an exempt supply, made in Uganda by a taxable person for consideration as part of his or her business activities.

(2) A supply is made as part of a person’s business activities if the supply is made by him or her as part of, or incidental to, any independent economic activity he or she conducts, whatever the purposes or results of that activity.

(3) The business activities of an individual do not include activities carried on by him or her only as part of his or her hobby or leisure activities.

(4) A supply is made for consideration if the supplier directly or indirectly receives payment for the supply, whether from the person supplied or any other person, including any payment wholly or partly in money or kind.

(5) The application to own use by a taxable person of goods and services supplied to a person for the purposes of the person’s business activities shall be regarded as a supply of those goods and services for consideration as part of the person’s business activities.

(5a) For the purposes of subsection (5), a supply of business goods and services for no consideration is an application to own use.

(6) Where goods and services have been supplied to a taxable person for the purposes of the person’s business activities, the supply of those goods and services for reduced consideration shall be regarded as a supply for consideration unless the goods and services are supplied or used only as trade samples.

(7) A supply is made for reduced consideration if the supply is made between associates for no consideration or between associates for a consideration that is less than the fair market value of the supply.

(8) Notwithstanding subsection (1), a supply of services by a foreign person for consideration as part of the person’s business activities is treated as a taxable supply if the services are considered as taking place in Uganda under section 16.

(9) Subject to section 19 and the Second Schedule, the sale or disposal of a business asset by a taxable person is a taxable supply.

19. Exempt supply.

(1) A supply of goods or services is an exempt supply if it is specified in the Second Schedule.

(2) Where a supply is an exempt supply under paragraph 1(k) of the Second Schedule, both the transferor and transferee shall, within 21 days of the transfer, notify the Commissioner General in writing of the details of the transfer.

20. Exempt import.

An import of goods is an exempt import if the goods—

(a) are exempt from customs duty under the Fifth Schedule of the East African Community Customs Management Act except compact fluorescent bulbs with a power connecting cap at the end; or

(b) would be exempt had they been supplied in Uganda.

20A.

An import of a service is an exempt import if the service would be exempt had it been supplied in Uganda.

PART VI
TAXABLE VALUE.

21. Taxable value of a taxable supply.

(1) Except as otherwise provided under this Act, the taxable value of a taxable supply is the total consideration paid in money or in kind by all persons for that supply.

(2) The taxable value of—

(a) a taxable supply of goods by way of an application to own use;

(b) a taxable supply for reduced consideration; or

is the fair market value of the goods and services at the time the supply is made.

(3) Where a taxable supply is made without a separate amount of the consideration being identified as a payment of tax, the taxable value of that supply is the total amount of the consideration paid excluding tax.

(4) The taxable value of a taxable supply of goods under a rental agreement, as defined in section 14, is the amount of the rental payments due or received.

(5) The taxable value of a taxable supply of goods or services where the Government has provided a subsidy is the consideration paid in money or in kind by all persons for that supply less the subsidy.

22. Adjustments.

(1) This section applies where, in relation to a taxable supply by a taxable person—

(a) the supply is cancelled;

(b) the nature of the supply has been fundamentally varied or altered;

(c) the previously agreed consideration for the supply has been altered by agreement with the recipient of the supply, whether due to an offer of a discount or for any other reason; or

(d) the goods or services or part of the goods or services have been returned to the supplier,

and the taxable person making the supply has—

(e) provided a tax invoice in relation to the supply and the amount shown in the invoice as the tax charged on the supply is incorrect as a result of the occurrence of any one or more of the above mentioned events; or

(f) filed a return for the tax period in which the supply occurred and has accounted for an incorrect amount of output tax on that supply as a result of the occurrence of any one or more of the above mentioned events.

(2) Where subsection (1) applies, the taxable person making the supply shall make an adjustment as specified in subsections (3) or (4).

(3) Where the output tax properly chargeable in respect of the supply exceeds the output tax actually accounted for by the taxable person making the supply, the amount of the excess shall be regarded as tax charged by the person in relation to a taxable supply made in the tax period in which the event referred to in subsection (1) occurred.

(4) Subject to subsection (6), where the output tax actually accounted for exceeds the output tax properly chargeable in relation to that supply, the taxable person making the supply shall be allowed a credit for the amount of the excess in the tax period in which the event referred to in subsection (1) occurred.

(5) The credit allowed under subsection (4) shall, for the purposes of this Act, be treated as a reduction of output tax.

(6) No credit is allowed under subsection (4) where the supply has been made to a person who is not a taxable person, unless the amount of the excess tax has been repaid by the taxable person to the recipient, whether in cash or as a credit against any amount owing to the taxable person by the recipient.

23. Taxable value of an import of goods.

The taxable value of an import of goods is the sum of—

(a) the value of the goods ascertained for the purposes of customs duty under the laws relating to customs;

(b) the amount of customs duty, excise tax and any other fiscal charge other than tax payable on those goods; and

(c) the value of any services to which section 12(3) applies which is not otherwise included in the customs value under paragraph (a).

PART VII
CALCULATION OF TAX PAYABLE.

24. Calculation of tax payable on a taxable transaction.

(1) Subject to subsection (2), the tax payable on a taxable transaction is calculated by applying the rate of tax to the taxable value of the transaction.

(2) Where the taxable value is determined under section 21(2) or (3), the tax payable is calculated by the formula specified in section 1(a) of the Fourth Schedule.

(3) Subject to subsection (4), the rate of tax shall be as specified in section 78(2).

(4) The rate of tax imposed on taxable supplies specified in the Third Schedule is zero.

(5) The tax payable on a taxable supply made by a contractor to a licensee to undertake mining or petroleum operations is deemed to have been paid by the licensee to the contractor provided the supply is for use by the licensee solely and exclusively for mining or petroleum operations.

25. Calculation of tax payable by taxable person for a tax period.

(1) Subject to section 26, the tax payable by a taxable person for a tax period is calculated according to the formula specified in section 1(b) of the Fourth Schedule.

(2) For a contractor, component X of the formula in paragraph 1(b) of the Fourth Schedule for a tax period does not include the amount of tax that the licensee is deemed to have paid to the contractor under section 24(5) for the period.

(3) For a licensee, component Y of the formula in paragraph 1(b) of the Fourth Schedule for a tax period does not include the amount of tax that the licensee is deemed to have paid to the contractor under section 24(5) for the period.

26. Cash basis accounting.

(1) This section applies to a taxable person, the annual value of whose taxable supplies does not exceed 500 million shillings.

(2) A taxable person to whom this section applies may elect to account for tax purposes on a cash basis.

(3) An election under subsection (2) shall be made in writing to the Commissioner General by the due date for the first return in which the taxable person seeks to use the method of accounting specified in subsection (2).

(4) Where a taxable person makes an election under subsection (2), that person must account for both the output tax payable and the input tax credited on a cash basis.

(5) A taxable person who has made an election under subsection (2) shall determine the tax payable for a tax period according to the formula specified in section 1(c) of the Fourth Schedule.

(6) An election made under subsection (2) remains in force until—

(a) withdrawn by the taxable person by notice in writing to the Commissioner General; or

(b) the Commissioner General, by notice in writing to the taxable person, requires the person to determine the tax payable for a tax period in accordance with section 25.

(7) A taxable person who has made an election under subsection (2) may not withdraw the election within two years after making the election unless the person is no longer a person to whom this section applies.

27. Consequences of a change in accounting basis.

(1) Every taxable person whose accounting basis is changed is liable for tax, if any, as determined under this section in the tax period in which the change occurred.

(2) Where a taxable person changes from the method of accounting provided under section 25 (referred to as the “invoice basis”) to the method of accounting provided under section 26 (referred to as the “cash basis”), the tax payable under subsection (1) is determined in accordance with the formula specified in section 1(d) of the Fourth Schedule.

(3) Where a taxable person changes from a cash basis to an invoice basis of accounting, the tax payable under subsection (1) is determined in accordance with the formula specified in section 1(e) of the Fourth Schedule.

(4) If the amount determined in accordance with subsection (2) or (3) is negative, it shall be refunded to the taxable person in accordance with section 42(1).

28. Credit for input tax.

(1) Where section 25 applies for the purposes of calculating the tax payable by a taxable person for a tax period, a credit is allowed to the taxable person for the tax payable in respect of—

(a) all taxable supplies made to that person during the tax period; or

(b) all imports of goods made by that person or import of services made by a contractor or licensee during the tax period,

if the supply or import is for use in the business of the taxable person.

(2) Where section 26 applies for the purposes of calculating the tax payable by a taxable person for a tax period, a credit is allowed to the taxable person for any tax paid in respect of taxable supplies to, or imports by, the taxable person where the supply or import is for use in the business of the taxable person.

(3) A credit is allowed to a taxable person on becoming registered for input tax paid or payable in respect of—

(a) all taxable supplies of goods, including capital assets, made to the person prior to the person becoming registered; or

(b) all imports of goods, including capital assets, made by the person prior to becoming registered,

where the supply or import was for use in the business of the taxable person, provided the goods are on hand at the date of registration and provided that the supply or import occurred not more than four months prior to the date of registration, or, in the case of capital goods, not more than six months before the date of registration.

(4) An input tax credit—

(a) under subsection (1) arises on the date the goods or services are supplied to, or imported by, the taxable person;

(b) under subsection (2) arises on the date the tax is paid; or

(5) A taxable person under this section shall not qualify for input tax credit in respect of a taxable supply or import of—

(a) a passenger automobile, and the repair and maintenance of that automobile, including spare parts, unless the automobile is acquired by the taxable person exclusively for the purpose of making a taxable supply of that automobile in the ordinary course of a continuous and regular business of selling or dealing in or hiring of passenger automobiles;

(b) entertainment, unless the taxable person—

(i) is in the business of providing entertainment; or

(ii) supplies meals or refreshments to his or her employees in premises operated by him or her, or on his or her behalf, solely for the benefit of his or her employees; or

(6) Subject to subsection (7), where a taxable supply to, or an import of goods by, a taxable person is partly for a business use as set out in subsection (1), (2) or (3) and partly for another use, the amount of the input tax allowed as a credit is that part of the input tax that relates to the business use.

(7) Subject to subsections (9) and (10), the input tax that may be credited by a taxable person for a tax period is—

(a) where all of the taxable person’s supplies for that period are taxable supplies, the whole of the input tax specified in subsection (1) or (2); or

(b) where only part of the taxable person’s supplies for that period are taxable supplies, the amount calculated according to the formula specified in section 1(f) of the Fourth Schedule.

(8) Where the fraction B/C in section 1(f) of the Fourth Schedule is less than 0.05, the taxable person may not credit any input tax for the period.

(9) Where the fraction B/C in section 1(f) of the Fourth Schedule is more than 0.95, the taxable person may credit all input tax for the period.

(10) Notwithstanding subsection (7)(b), the Commissioner General may approve a proposal by a taxable person for the apportionment of input tax credit where the taxable person makes both taxable and exempt supplies.

(11) Subject to subsection (13), an input tax credit allowed under this section may not be claimed by the taxable person until the tax period in which the taxable person has—

(a) an original tax invoice for the taxable supply; or

(b) a bill of entry or other document prescribed under the East African Customs and Transfer Tax Management Act,

evidencing the amount of input tax.

(12) Where a taxable person does not have a tax invoice evidencing the input tax paid, the Commissioner General may allow an input tax credit in the tax period in which the credit arises where the Commissioner General is satisfied that—

(a) the taxable person took all reasonable steps to acquire a tax invoice;

(b) the failure to acquire a tax invoice was not the fault of the taxable person; and

(13) Where a taxable person has made a calculation under subsection (7) for any tax period of a calendar year, he or she shall, in the first tax period of the following year, make a calculation based on the annual value of taxable and exempt supplies.

(14) Where—

(a) the calendar year credit exceeds the return credit, the excess shall be claimed as a credit in the first tax period of the following calendar year; or

(b) the return credit exceeds the calendar year credit, the excess shall be regarded as tax charged by the taxable person in relation to a taxable supply made in the first tax period of the following calendar year.

(15) In this section—

(a) “calendar year credit” means the total input tax payable, where section 25 applies, or paid, where section 26 applies, for the calendar year;

(b) “entertainment” means the provision of food, beverages, tobacco, accommodation, amusement, recreation or hospitality of any kind;

(d) “return credit” means the total of the input tax claimed as a credit in each tax period of the calendar year; and

(e) “telephone services” does not include telephone call services supplied to a hotel, lodge or similar establishment where output tax has been accounted for by the establishment on the supply of that service to their customers.

29. Tax invoices.

(1) A taxable person making a taxable supply to any person shall provide that other person, at the time of supply, with an original tax invoice for the supply.

(2) A taxable person making a taxable supply shall retain one copy of the tax invoice referred to in subsection (1).

(3) Where a supplied person loses the original tax invoice, the supplier may provide a duplicate copy clearly marked “COPY”.

(4) An original tax invoice shall not be provided in any circumstance other than that specified in subsection (1).

(5) A person—

(a) who has not received a tax invoice as required by subsection (1); or

(b) to whom section 28(3) applies,

may request a person, who has supplied goods or services to him or her, to provide a tax invoice in respect of the supply.

(6) A request for a tax invoice under subsection (5) shall be made—

(a) in the case of a request under subsection (5)(a), within 30 days after the date of the supply;

(b) in the case of a request under subsection (5)(b), within 30 days after the date of registration.

(7) A taxable person who receives a request under subsection (5) shall comply with the request within 14 days after receiving that request.

(8) A tax invoice is an invoice containing the particulars specified in section 2 of the Fourth Schedule.

30. Credit and debit notes.

(1) Where a tax invoice has been issued in the circumstances specified in section 22(1)(e) and the amount shown as tax charged in that tax invoice exceeds the tax properly chargeable in respect of the supply, the taxable person making the supply shall provide the recipient of the supply with a credit note containing the particulars specified in section 3 of the Fourth Schedule.

(2) Where a tax invoice has been issued in the circumstances specified in section 22(1)(e) and the tax properly chargeable in respect of the supply exceeds the amount shown as tax charged in that tax invoice, the taxable person making the supply shall provide the recipient of the supply with a debit note containing the particulars specified in section 4 of the Fourth Schedule.

PART VIII
PROCEDURE AND ADMINISTRATION OF TAX.

Returns and assessments.

31.–40…

Collection and recovery of tax.

41. Duties of receivers.

(1) A receiver shall in writing notify the Commissioner General within 14 days after being appointed to the position of receiver or taking possession of an asset in Uganda, whichever first occurs.

(2) The Commissioner General may in writing notify a receiver of the amount which appears to the Commissioner General to be sufficient to provide for any tax which is or will become payable by the person whose assets are in the possession of the receiver.

(3) A receiver shall not part with any asset in Uganda which is held by the receiver in his or her capacity as receiver without the prior written permission of the Commissioner General.

(4) A receiver—

(a) shall set aside, out of the proceeds of the sale of an asset, the amount notified by the Commissioner General under subsection (2), or such lesser amount as is subsequently agreed on by the Commissioner General;

(b) is liable to the extent of the amount set aside for the tax of the person who owned the asset; and

(c) may pay any debt that has priority over the tax referred to in this section notwithstanding any provision of this section.

(5) A receiver is personally liable to the extent of any amount required to be set aside under subsection (4) for the tax referred to in subsection (2) if, and to the extent that, the receiver fails to comply with the requirements of this section.

(6) In this section, “receiver” includes a person who, with respect to an asset in Uganda, is—

(a) a liquidator of a company;

(b) a receiver appointed out of court or by a court;

(d) a mortgagee in possession;

(e) an executor of a deceased person; or

(f) any other person conducting the business of a person legally incapacitated.

Refund of tax.

42. Refund of overpaid tax.

(1) If, for any tax period, a taxable person’s input tax credit exceeds his or her liability for tax for that period, the Commissioner General shall refund him or her the excess within one month of the due date for the return for the tax period to which the excess relates, or within one month of the date when the return was made if the return was not made by the due date.

(2) Notwithstanding subsection (1), the Commissioner General—

(a) shall, where the taxable person’s input credit exceeds his or her liability for tax for that period by less than five million shillings, except in the case of a licensee or person providing mainly zero-rated supplies, offset that amount against the future liability of the taxable person; and

(b) may, with the consent of the taxable person, where the taxable person’s input credit exceeds his or her liability for tax for that period by five million shillings or more, offset that amount against the future liability of the taxable person.

(2a) If for any tax period taxable supplies in stock or stock in transit are lost due to theft, fire, accident, or force majeure and input tax has been paid on those goods, the Commissioner General may grant a refund or allow credit for the input tax paid on those goods if there is evidence that the goods are destroyed or lost and cannot be recovered.

(3) A person may claim a refund of any output tax paid in excess of the amount of tax due under this Act for a tax period.

(4) A claim for a refund under subsection (3) shall be made in a return within three years after the end of the tax period in which tax was overpaid.

(5) Where a person has claimed a refund under subsection (3) and the Commissioner General is satisfied that the person has paid an amount of tax in excess of the amount of tax due, the Commissioner General shall refund immediately the excess to the taxable person.

(6) Where a person claiming a refund is required by the Commissioner General to provide accounts or records to substantiate the claim and fails to do so in a manner satisfactory to the Commissioner General within seven days of being requested, the time period specified in subsection (1) for making the refund shall not be binding on the Commissioner General.

(7) The Commissioner General shall serve on a person claiming a refund a notice in writing of a decision in respect of the claim.

(8) A person dissatisfied with a decision under subsection (6) may only challenge the decision under Part IV of the Tax Appeals Tribunal Act.

(9) No refund shall be made under subsection (5) in relation to a taxable supply that has been made to a person who is not a taxable person, unless the Commissioner General is satisfied that the amount of the excess tax has been repaid by the taxable person to the recipient, whether in cash or as a credit against an amount owing to the taxable person by the recipient.

43. Refund of tax for bad debts.

(1) Where a taxable person has supplied goods or services for a consideration in money, and has—

(a) paid the full tax on the supply to the Commissioner General, but has not within two years after the supply received payment, in whole or in part from the person to whom the goods or services are supplied; and

(b) taken all reasonable steps to the satisfaction of the Commissioner General to pursue payment and he or she reasonably believes that he or she will not be paid,

that person may seek a refund of that portion of the tax paid for which he or she has not received payment.

(2) If a refund is taken under subsection (1) and the taxable person later receives payment in whole or in part, in respect of the debt, he or she shall remit to the Commissioner General, with his or her next tax return, a sum equal to the portion of the payment that represents the tax refunded.

(3) A registered supplier who fails to remit the tax in accordance with subsection (2) with his or her next return commits an offence and is liable on conviction to a fine not exceeding 500,000 shillings, in addition to the payment of the full amount of the undeclared tax plus a penal tax on that outstanding tax calculated at the rate specified in the Fifth Schedule.

44. Interest on overpayments and late refunds.

(1) Where the Commissioner General is required to refund an amount of tax to a person as a result of a decision of the reviewing body as defined in section 28 of the Tax Appeals Tribunal Act, he or she shall pay interest at a rate of five percentage points higher than the prevailing official bank rate of the Bank of Uganda on the amount of the refund for the period commencing from the date the person paid the tax refunded and ending on the last day of the month the refund is made.

(2) Where the Commissioner General fails to make a refund required under section 42(1) within the time specified in that section, he or she shall pay interest at a rate of five percentage points higher than the prevailing official bank rate of the Bank of Uganda on the amount of the refund for the period commencing on the day after the latest date for making the refund and ending on the date the refund is made.

(3) Where the Commissioner General finds, after conducting an investigation of any amount shown as an excess in terms of section 42(1), that the excess amount of input tax credit is greater than the true amount due in excess of not less than 50,000 shillings, no interest shall be payable in terms of subsection (2) in respect of the delay in making the refund.

45. Refund of tax to diplomats and diplomatic and consular missions and international organisations.

(1) The Minister may, with the concurrence of the Minister of Foreign Affairs, authorise the granting of a refund in respect of tax paid or borne by—

(a) any person enjoying full or limited immunity, rights or privileges under any local or international laws applicable in Uganda or under recognised principles of international law; or

(b) any diplomatic or consular mission of a foreign country or any public international organisation established in Uganda or listed in the First Schedule to this Act relating to transactions concluded for its official purposes.

(2) The refund provided for in subsection (1)(a) shall not be available to any citizen or permanent resident of Uganda.

(3) Any claim for a refund of tax under this section shall be made in such form and at a time that the Commissioner General may prescribe and shall be accompanied by proof of payment of tax.

(4) The Minister may make regulations specifying conditions to be met or restrictions to apply for claiming or granting of tax refunds under this section.

Records and investigation powers.

46.–64. …

Offences and penal tax.

65. Penal tax.

(1) A person who fails to apply for registration as is required by section 7(1) or (5) is liable to pay a penal tax equal to double the amount of tax payable during the period commencing on the last day of the application period in section 7(1) until either the person files an application for registration with the Commissioner General or the Commissioner General registers the person under section 8(6).

(2) A person who fails to lodge a return within the required time under this Act is liable to pay a penal tax amounting to whichever is the greater of the following—

(a) two hundred thousand shillings; or

(b) an interest charge for the period the return is outstanding calculated according to the formula specified in the Fifth Schedule.

(3) A person who fails to pay tax imposed under this Act on or before the due date is liable to pay a penal tax on the unpaid tax at a rate specified in the Fifth Schedule for the tax which is outstanding.

(4) If a person pays a penal tax under subsection (3) and the tax to which it relates is found not to have been due and payable by the person and is refunded, then the penal tax, or so much of the penal tax as relates to the amount of the refund, shall also be refunded to that person.

(5) A person who fails to maintain proper records in a tax period in accordance with the requirements of this Act is liable to pay a penal tax equal to double the amount of tax payable by the person for the tax period.

(6) Where a person knowingly or recklessly—

(a) makes a statement or declaration to an official of the Uganda Revenue Authority that is false or misleading in a material particular; or

(b) omits from a statement made to an official of the Uganda Revenue Authority any matter or thing without which the statement is misleading in a material particular, and

(i) the tax properly payable by the person exceeds the tax that was assessed as payable based on the false or misleading information;

(ii) the amount of the refund claimed was false; or

(iii) the person submitted a return with an incorrect offset claim,

that person is liable to pay penal tax equal to double the amount of the excess tax, refund or claim.

(7) Section 59(4) applies in determining whether a person has made a statement to an official of the Uganda Revenue Authority.

66. Recovery of penal tax.

(1) Where good cause is shown, in writing, by the person liable to pay a penal tax, the Commissioner General may remit in whole or part any penal tax payable other than the penal tax imposed or payable under section 65 for late payment.

(2) Subject to subsection (3), the imposition of a penal tax is in addition to any penalty imposed as a result of a conviction for an offence under sections 51 to 64.

(3) No penal tax is payable under section 65 where the person has been convicted of an offence under section 51, 55 or 59 in respect of the same act or omission.

(4) If a penal tax under section 65 has been paid and the Commissioner General institutes a prosecution proceeding under section 51, 55 or 59 in respect of the same act or omission, the Commissioner General shall refund the amount of penal tax paid; and that penal tax is not payable unless the prosecution is withdrawn.

(5) Penal tax shall for all purposes of this Act be treated as a tax of the same nature as the output tax to which it relates and shall be payable in and for the same tax period as that output tax.

(6) Penal tax shall be assessed by the Commissioner General in the same manner as the output tax to which it relates and an assessment of penal tax shall be treated for all purposes as an assessment of tax under this Act.

67. Remission of tax.

(1) Where the Commissioner General is of the opinion that the whole or any part of the tax due under this Act from a taxpayer cannot be effectively recovered by reason of—

(a) considerations of hardship; or

(b) impossibility, undue difficulty or the excessive cost of recovery,

the Commissioner General may refer the taxpayer’s case to the Minister.

(2) Where a taxpayer’s case has been referred to the Minister under subsection (1) and the Minister is satisfied that the tax due cannot be effectively recovered, the Minister may remit or write off in whole or part, the tax due from the taxpayer.

PART IX
GENERAL PROVISIONS.

68.–70A. …

71. Application of Act to partnerships and unincorporated associations.

(1) This Act applies to a partnership as if the partnership were a person, but with the following changes—

(a) obligations that would be imposed on the partnership are imposed on each partner, but may be discharged by any of the partners;

(b) the partners are jointly and severally liable to pay any amount that would be payable by the partnership; and

(c) any offence under this Act that would otherwise be committed by the partnership is taken to have been committed by each of the partners.

(2) This Act applies to an unincorporated association as if it were a person, but the obligations that would be imposed on the association are imposed on each member of the committee of management of the association, but may be discharged by any of those members.

(3) In a prosecution of a person for an offence that the person is taken to have committed under subsection (1)(c), it is a defence if the person proves that he or she—

(a) did not aid, abet, counsel or procure the relevant act or omission; and

(b) was not in any way knowingly concerned in, or party to, the relevant act or omission.

72. Trustee.

A person who is a trustee in more than one capacity is treated for the purposes of this Act as a separate person in relation to each of those capacities.

73. Currency conversion.

(1) For the purposes of this Act, all amounts of money are to be expressed in Uganda shillings.

(2) Where an amount is expressed in a currency other than Uganda shillings, the amount shall be converted into the Uganda shillings using the weighted selling rates of the previous month for the currency concerned.

74. Prices quoted to include tax.

Any price advertised or quoted for a taxable supply shall include tax, and the advertisement or quotation shall state that the price includes the tax.

75. Schemes for obtaining undue tax benefits.

(1) Notwithstanding anything in this Act, if the Commissioner General is satisfied that a scheme has been entered into or carried out where—

(a) a person has obtained a tax benefit in connection with the scheme; and

(b) having regard to the substance of the scheme, it would be concluded that the person, or one of the persons, who entered into or carried out the scheme did so for the sole or dominant purpose of enabling the person to obtain the tax benefit,

the Commissioner General may determine the liability of the person who has obtained the tax benefit as if the scheme had not been entered into or carried out, or in a manner as in the circumstances the Commissioner General considers appropriate for the prevention or reduction of the tax benefit.

(2) In this section—

(a) “scheme” includes any agreement, arrangement, promise or undertaking whether express or implied and whether or not enforceable, or intended to be enforceable, by legal proceedings, and any plan, proposal, course of action or course of conduct;

(b) “tax benefit” includes—

(i) a reduction in the liability of any person to pay tax;

(ii) an increase in the entitlement of a person to a credit or refund; or

(iii) any other avoidance or postponement of liability for the payment of tax.

76. International agreements.

(1) To the extent that the terms of a treaty or other international agreement to which Uganda is a party are inconsistent with the provisions of this Act, apart from section 75, the terms of the treaty or international agreement prevail over the provisions of this Act.

(2) In this section, “international agreement” means an agreement between Uganda and a foreign government or a public international organisation.

77. Priority of Schedules.

Where a supply of goods or services may be covered by both the Second Schedule and the Third Schedule, the supply shall be treated as being within the Third Schedule.

78. Regulations and amendment of Schedules.

(1) The Minister may make regulations for better carrying into effect the provisions and purposes of this Act.

(2) The Minister may by statutory order specify the rates of tax payable under this Act; and the order shall cease to have effect unless it is introduced into Parliament within three months from the date of its publication and Parliament approves a resolution confirming that order.

(3) The Minister may, with the approval of the Cabinet, make regulations amending the First, Second and Third Schedules.

79.–80…

81. International agreements.

Where an international agreement entered into between the Government of Uganda and the government of a foreign country or an international organisation, provides tax reliefs or benefits to a foreign government or an international organisation, the provisions relating to tax reliefs or benefits shall have effect—

(a) on the ratification of the agreement by Cabinet; and

(b) upon approval by Parliament.

First Schedule.

ss. 1, 45.

Public international organisations.

African Development Bank.

African Union.

Austrian Development Agency (ADA).

Belgian Technical Cooperation (BTC).

Common Market for East and Southern Africa (COMESA).

Danish International Development Agency (DANIDA).

Department for International Development (DFID).

Desert Locust Control Organisation for Eastern Africa (DLCOEA).

Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ).

East African Community, its Organs and Institutions.

East African Development Bank (EADB).

Eastern and Southern Africa Management Institute (ESAMI).

European Union (EU).

Food and Agricultural Organisation (FAO).

French Development Agency (Agence Francaise de Development) (AFD).

Global Fund to fight AIDS, Malaria and Tuberculosis.

Icelandic International Development Agency (ICEIDA).

IGAD Regional HIV and AIDS Partnership Programme (IRAPP).

International Atomic Agency (IAA).

International Civil Aviation Organisation (ICAO).

International Committee of the Red Cross (ICRC).

International Criminal Court (ICC).

International Labour Organisation (ILO).

International Monetary Fund (IMF).

International Organisation for Migration (IOM).

International Telecommunications Union (ITU).

Japan International Cooperation Agency (JICA).

Korea International Cooperation Agency (KOICA).

Kreditanstalt fur Wiederaufbau (KFW).

Medical Research Council.

Netherlands Development Organisation (SNV).

Nile Basin Initiative.

Norwegian Agency for Development Cooperation (NORAD).

Swedish International Development Agency (SIDA).

Uganda Red Cross Society.

Union of National Radio and Television Organisations of Africa (UNRTNAPEC).

United Nations African Institute for the Prevention of Crime and the Treatment of Offenders (UNAFRI).

United Nations Children’s Fund (UNICEF).

United Nations Development Programme (UNDP).

United Nations Fund for Population Activities (UNFPA).

United Nations High Commission for Refugees (UNHCR).

United States Agency for International Development (USAID).

Universal Postal Union (UPU).

World Bank.

World Food Programme (WFP).

World Health Organisation (WHO).

World Meteorological Organisation (WMO).

Second Schedule.

s. 19.

Exempt supplies.

1. The following supplies are specified as exempt supplies for the purposes of section 19—

(a) the supply of livestock, unprocessed foodstuffs and unprocessed agricultural products except wheat grain;

(b) the supply of postage stamps;

(d) the supply of insurance services;

(e) the supply of land;

(f) a supply by way of sale, leasing or letting of immovable property, other than—

(i) a sale, lease or letting of commercial premises;

(ii) a sale, lease or letting for parking or storing cars or other vehicles;

(iii) a sale, lease or letting of hotel or holiday accommodation;

(iv) a sale, lease or letting for periods not exceeding three months; or

(v) a sale, lease or letting of service apartments;

(g) the supply of education services;

(h) the supply of veterinary, medical, dental, and nursing services;

(i) the supply of social welfare services;

(j) the supply of betting, lotteries and games of chance;

(k) the supply of goods as part of the transfer of a business as a going concern by one taxable person to another taxable person;

(l) the supply of burial and cremation services;

(m) the supply of precious metals and other valuables to the Bank of Uganda for the State Treasury;

(n) the supply of passenger transportation services (other than tour and travel operators);

(o) the supply of petroleum fuels subject to excise duty (motor spirit, kerosene and gas oil), spirit type jet fuel, kerosene type jet fuel and residual oils for use in thermal power generation to the national grid;

(p) …

(q) the supply of dental, medical, and veterinary goods and for the purposes of this subparagraph “goods” means—

(i) dental, medical and veterinary equipment;

(ii) ambulances;

(iii) contraceptives of all forms;

(iv) maternity kits (mama kits);

(v) medical examination gloves;

(vi) medicated cotton wool;

(vii) mosquito nets, acaricides, insecticides and mosquito repellent devices; and

(viii) diapers;

(r) the supply of animal feeds;

(s)

(t) the supply of photosensitive semiconductor devices, including photovoltaic devices, whether or not assembled in modules or made into panels; light emitting diodes; solar water heaters, solar refrigerators and solar cookers;

(ta) supply of power generated by solar;

(u) the supply of accommodation in tourist lodges and hotels outside Kampala District;

(v) supply of new—

(i) computers;

(ii) desktop printers; and

(iii) computer parts and accessories;

(w) the supply of computer software and software licences;

(x) the supply of lifejackets, lifesaving gear, headgear and speed governors;

(y)–(z) …

(aa) the supply of specialised vehicles, plant and machinery, feasibility studies, engineering designs, consultancy services and civil works related to hydroelectric power, roads and bridges construction, public waterworks, agriculture, education and health sectors;

(bb) …

(cc) the supply of Liquefied Petroleum Gas;

(dd) …

(dda) the supply of any goods and services to the contractors and subcontractors of hydroelectric power projects;

(ee) …

(ff) the supply of salt;

(gg) …

(hh) supply of packing materials exclusively used by the milling industry for packing milled products;

(ii) supply of packing materials exclusively used by the diary industry for packing milk;

(jj) …

(kk) …

2. In this Schedule—

(a) “education services” means education provided by—

(i) a preprimary, primary or secondary school;

(ii) a technical college or university;

(iii) an institution established for the promotion of adult education, vocational training, technical education or the education or training of physically or mentally handicapped persons;

(b) “financial services” means—

(i) granting, negotiating and dealing with loans, credit, credit guarantees and any security for money, including management of loans, credit or credit guarantees by the grantor;

(ii) transactions concerning deposit and current accounts, payments, transfers, debts, foreign currency sales and purchases, cheques, and negotiable instruments, other than debt collection and factoring;

(iii) transactions relating to shares, stocks, bonds and other securities, other than custody services;

(iv) management of investment funds, but does not include provision of credit facilities under a hire-purchase or finance lease agreement;

(c) “passenger transportation services” means the transportation of fare paying passengers and their personal effects by road, rail, water or air, but does not include passenger transport services provided by a registered tour operator; and

(d) “social welfare services” means—

(i) care for the elderly, sick and disabled, including care in a hospital, aged person’s home and similar establishments; or

(ii) care and welfare services provided for the benefit of minors;

(e) “transfer of a going concern” includes the disposal of any part of a business which is capable of separate operation;

(f) “insurance services” include brokerage.

3. For the purposes of paragraph 1(a) of this Schedule, the term “unprocessed” includes low value added activity such as sorting, drying, salting, filleting, deboning, freezing, chilling, or bulk packaging, where, except in the case of packaging, the value added does not exceed five percent of the total value of the supply.

Third Schedule.

s. 24(4).

Zero rated supplies.

1. The following supplies are specified for the purposes of section 24(4)—

(a) a supply of goods or services where the goods or services are exported from Uganda as part of the supply;

(b) the supply of international transport of goods or passengers and tickets for their transport;

(d) the supply of educational materials and the supply of printing services for educational materials;

(e) the supply of seeds, fertilisers, pesticides and hoes;

(f) the supply of cereals where the cereals are grown and milled in Uganda;

(g)

(h) the supply of milk, including milk treated in any way to preserve it;

(ha) …

(i) …

(j) the supply of sanitary towels and tampons and inputs for their manufacture;

(k) the supply of leased aircraft, aircraft engines, spare engines, spare parts for aircraft and aircraft maintenance equipment;

(l) the supply of cereals, where the cereals are grown and milled in Uganda;

(m) the supply of handling services provided by the National Medical Stores in respect of medicines and other medical supplies, funded by donors.

2. For the purposes of clause 1(a), goods or services are treated as exported from Uganda if—

(a) in the case of goods, the goods are delivered to, or made available at, an address outside Uganda as evidenced by documentary proof acceptable to the Commissioner General; or

(b) in the case of services, the services were supplied by a person engaged exclusively in handling of goods for export at a port of exit or were supplied for use or consumption outside Uganda as evidenced by documentary proof acceptable to the Commissioner General.

3. For the purposes of clause (1)(b), international transport of goods or passengers occurs where goods or passengers are transported by road, rail, water or air—

(a) from a place outside Uganda to another place outside Uganda where the transport or part of the transport is across the territory of Uganda;

(b) from a place outside Uganda to a place in Uganda; or

4. In this Schedule—

(a) “educational materials” means materials whether printed or audio suitable for use only in public libraries and educational establishments specified in paragraph 2 of the Second Schedule to this Act;

(b) “pesticides” means insecticides, rodenticides, fungicides and herbicides but does not include pesticides packaged for personal or domestic use.

Fourth Schedule.

ss. 24, 25, 26, 27, 28, 29, 30.

Formulae, tax invoices, credit notes and debit notes.

1.—

(a) For the purposes of section 24(2), the following formula shall apply—

A x B

Where—
A	is the taxable value as determined under section 21(2) or (3); and
B	is the tax fraction.

(b) For the purposes of section 25, the following formula shall apply—

X – Y

Where—
X	is a total of the tax payable in respect of taxable supplies made by the taxable person during the tax period; and
Y	is the total credit allowed to the taxable person in the tax period under the Act.

S – T

where—
S	is the total output tax received by the taxable person during the tax period in respect of taxable supplies made by the person; and
T	is the total input tax credit allowed to the taxable person in the tax period under the Act.

(d) For the purposes of section 27(2), the following formula shall apply—

M – N

where—
M	is the total amount of input tax credited in relation to amounts due by the taxable person at the time of change in the accounting basis; and
N	is the total amount of output tax accounted for in relation to amounts due to the taxable person at the time of change in the accounting basis.

(e) For the purposes of section 27(3), the following formula shall apply—

O – P

where—
O	is the total amount of output tax that would have been accounted for on amounts due to the taxable person at the time of change in accounting basis if the taxable person had been accounting for tax on an invoice basis; and
P	is the total amount of input tax that would have been credited on amounts due by a taxable person at the time of change in accounting basis if the taxable person had been accounting for tax on an invoice basis.

(f) For the purposes of section 28(7)(b), the following formula shall apply—

A x B / C

where—
A	is the total amount of input tax for the period;
B	is the total amount of taxable supplies made by the taxable person during the period; and
C	is the total amount of all supplies made by the taxable person during the period other than an exempt supply under clause 1(k) of the Second Schedule.

2. A tax invoice as required by section 29 shall, unless the Commissioner General provides otherwise, contain the following particulars—

(a) the words “tax invoice” written in a prominent place;

(b) the commercial name, address, place of business and the taxpayer identification and VAT registration numbers of the taxable person making the supply;

(c) the commercial name, address, place of business and the taxpayer identification number and VAT registration number of the recipient of the taxable supply;

(d) the individualised serial number and the date on which the tax invoice is issued;

(e) a description of the goods or services supplied and the date on which the supply is made;

(f) the quantity or volume of the goods or services supplied;

(g) the rate of tax for each category of goods and services described in the invoice; and

(h) either—

(i) the total amount of the tax charged, the consideration for the supply exclusive of tax and the consideration inclusive of tax; or

(ii) where the amount of tax charged is calculated under section 24(2), the consideration for the supply, a statement that it includes a charge in respect of the tax and the rate at which the tax was charged.

3. A credit note as required by section 30(1) shall, unless the Commissioner General provides otherwise, contain the following particulars—

(a) the words “credit note” in a prominent place;

(b) the commercial name, address, place of business and the taxpayer identification and VAT registration numbers of the taxable person making the supply;

(c) the commercial name, address, place of business and the taxpayer identification and VAT registration numbers of the recipient of the taxable supply;

(d) the date on which the credit note was issued;

(e) the rate of tax; and

(f) either—

(i) the taxable value of the supply shown on the tax invoice, the correct amount of the taxable value of the supply, the difference between those two amounts and the tax charged that relates to that difference; or

(ii) where the tax charged is calculated under section 24(2), the amount of the difference between the taxable value shown on the tax invoice and the correct amount of the taxable value and a statement that the difference includes a charge in respect of the tax;

(g) a brief explanation of the circumstances giving rise to the issuing of the credit note; and

(h) information sufficient to identify the taxable supply to which the credit note relates.

4. A debit note as required by section 30(2) shall, unless the Commissioner General provides otherwise, contain the following particulars—

(a) the words “debit note” in a prominent place;

(b) the commercial name, address, place of business and the taxpayer identification and VAT registration numbers of the taxable person making the supply;

(c) the commercial name, address, place of business and the taxpayer identification and registration numbers of the recipient of the taxable supply;

(d) the date on which the debit note was issued;

(e) the rate of tax;

(f) either—

(g) a brief explanation of the circumstances giving rise to the issuing of the debit note; and

(h) information sufficient to identify the taxable supply to which the debit note relates.

Fifth Schedule.

s. 65.

Calculation of interest penalty.

The rate of interest chargeable as penalty shall be two percent per month, compounded.

History

Legislation

Number

ss.Statute8/1996 Act3/1996s. 13Act12/1997s. 42(b)Act2/1998ss. 8, 9Act1/1999ss. 2-9Act7/1999ss. 2-9Act2/2002 Act24/2002 Act15/2003 Act4/2005 Act15/2005 Act31/2006 Act6/2008 Act22/2008 Act12/2009 Act25/2010 Act18/2011 Act8/2012 Act14/2013 Act14/2014s. 77(2)Act5/2015

Cross References

East African Community Customs Management Act, 2004.

East African Customs and Transfer Tax Management Act, Laws of the Community, 1970 Revision, Cap. 27.

Petroleum (Exploration, Development and Production) Act, 2013.

Petroleum (Refinery, Conversion, Transmission and Midstream Storage) Act, 2013.

Tax Appeals Tribunal Act, Cap. 345.

{/mprestriction}