[2003] UGCommC 21

[2003] UGCommC 21

The court held that the withholding tax assessed and collected by the Uganda Revenue Authority on payments made to non-UK inspection entities for pre-shipment inspection services was lawful. The court rejected INTERTEK's argument that the absence of privity of contract between the non-UK entities and the Government...

Source-derived case information.

Citation
[2003] UGCommC 21
Parties
Appellant: Intertek Testing Services International Limited; Respondent: Uganda Revenue Authority
Court
Commercial Court of Uganda
Jurisdiction
Uganda
Judgment Date
3 December 2003
Case Number
Civil Appeal No. 5 of 2002
Procedural Posture
Civil Appeal / Judgment
Outcome
appeal dismissed
Legal Topics
Withholding Tax, Source of Income, International Taxation, Double Taxation Agreements
Source Language
english
Tax Law Commercial and Corporate Withholding Tax Source of Income International Taxation Double Taxation Agreements

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Summary, issues, holding and outcome

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Parties

Intertek Testing Services International Limited

Appellant

Uganda Revenue Authority

Respondent

Procedural Posture

Civil Appeal / Judgment

Legal Issues

  1. 1 Whether the withholding tax assessed and collected by the Uganda Revenue Authority on payments to non-UK inspection entities was lawful under the Income Tax Act.
  2. 2 Whether income paid to non-UK entities for pre-shipment inspection services was sourced from Uganda and subject to Ugandan tax.
  3. 3 Whether the absence of privity of contract between the non-UK entities and the Government of Uganda exempts such payments from Ugandan tax.

Ratio Decidendi

The court held that the withholding tax assessed and collected by the Uganda Revenue Authority on payments made to non-UK inspection entities for pre-shipment inspection services was lawful. The court rejected INTERTEK's argument that the absence of privity of contract between the non-UK entities and the Government of Uganda exempted such payments from Ugandan tax. The court found that section 85 of the Income Tax Act does not require the service provider to be a direct party to the contract with the Government; it is sufficient that the services performed give rise to income sourced in Uganda. The doctrine of substance over form was applied, emphasizing that the economic reality of the...

Court Disposition

appeal dismissed

Orders

  • The appeal is dismissed with costs awarded to the respondent.