Value Added Tax Act

This section provides definitions of terms used in the Act (for example: "application to own use", "Commissioner General", "company", "consideration", "import", "importer", "input tax", "Minister", "money", and "tax fraction").

The provision defines 'fair market value' for a taxable supply as the money consideration a similar supply would fetch in similar circumstances in Uganda; if it cannot be determined, the Commissioner General's opinion determines the fair market value.

Defines "associate" to include any person likely to act in accordance with another person's directions, requests, suggestions or wishes, and lists categories such as relatives, partners, trustees, companies controlling 50 percent or more of voting power, and persons benefiting under a trust.

This section charges value added tax on every taxable supply in Uganda by a taxable person; on every import of goods other than an exempt import; and on the supply of any imported services by any person.

Specifies who must pay the tax: the taxable person making a taxable supply pays for supplies; the importer pays for imported goods; the recipient of imported services pays for imported services.

People registered under section 7 become taxable when their registration takes effect; people required to apply for registration become taxable from the start of the tax period after the duty to apply arose.

Unregistered persons who meet specified turnover conditions must apply to be registered; some suppliers may apply voluntarily; public authorities carrying on business must register when activities commence.

The Commissioner General must register qualifying applicants under section 7 and issue a certificate of registration; the Commissioner General must also maintain a register and serve notices within one month in specified cases; taxable persons must notify the Commissioner General of changes.

Rules for cancellation of VAT/GST registration: who may cancel, when taxable persons must or may apply for cancellation, notice timing, effect of cancellation and removal from the register.

Defines "supply of goods" to include arrangements where the owner parts (or will part) with possession, agreements of sale and purchase, supplies of energy or water, and the application of goods to own use.

Defines "supply of services" as any supply that is not goods or money and gives examples; excludes supplies made by an employee to an employer by reason of employment.

Services incidental to goods are treated as part of the goods supply; goods incidental to services are treated as part of the services supply; services incidental to import are part of the import; regulations under section 78 may classify supplies as goods or services.

When a person supplies goods or services as an agent for a principal, the supply is treated as a supply by the principal; but this does not apply where an agent supplies services to the principal.

Specifies when a supply of goods or services is treated as occurring for tax purposes and requires a person making certain supplies to keep a record of the supply date.

The place of supply for goods is where the goods are delivered or made available by the supplier; for energy and utilities it is where the supply is received.

A supply of services takes place where the services are rendered; special rules apply for immovable property, transport, certain Third Schedule services, and paid reception of communication signals.

An import of goods occurs either on the date customs duty is payable, or if no duty is payable, on the date the goods are brought into Uganda.

The Commissioner General must make prescribed documents available to the public at the Uganda Revenue Authority, other locations, or by mail; the Commissioner General may determine the form of prescribed documents and locations for availability, and documents issued by the Commissioner General are sufficiently authenticated if the name or title of the Commissioner General or an authorised officer is printed, stamped or written on them.

Specifies methods by which a notice or other document required or authorised under the Act is considered sufficiently served on individuals and on other persons in Uganda.

Taxable partnerships, trusts, companies, nonresident individuals, and resident individuals outside Uganda for more than one tax period must nominate a resident individual as a nominated person; the Commissioner General appoints one if they fail to do so; taxable persons may change the nominated person by written notice; the nominated person bears responsibilities for obligations under the Act (subject to section 71).

The Act treats partnerships and unincorporated associations as persons: obligations of the partnership/association are imposed on each partner or each member of its management committee (but may be discharged by any partner/member); partners are jointly and severally liable for amounts payable by the partnership; offences by the partnership are taken to be committed by each partner; and in prosecutions under subsection (1)(c) a person has a defence if they prove they did not aid, abet, counsel, procure or were not knowingly concerned in the act or omission.

A person who is a trustee in more than one capacity is treated as a separate person for each capacity.

Amounts of money must be expressed in Uganda shillings, and amounts in other currencies must be converted into Uganda shillings using the weighted selling rates of the previous month for that currency.

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.

Defines “scheme” and “tax benefit”; provides that if the Commissioner General is satisfied a scheme was entered into with the sole or dominant purpose of obtaining a tax benefit, the section applies.

Where the terms of a treaty or other international agreement to which Uganda is a party conflict with this Act, the treaty terms prevail over the Act (except for section 75).

If a supply of goods or services is covered by both the Second Schedule and the Third Schedule, it is to be treated as being within the Third Schedule.

The Minister may make regulations to implement this Act, may specify tax rates by statutory order subject to parliamentary approval within three months, and may amend specified Schedules with Cabinet approval.

A taxable supply is a supply of goods or services (not exempt) made by a taxable person for consideration as part of his or her business activities.

If a supply is exempt under paragraph 1(k) of the Second Schedule, both the transferor and transferee must notify the Commissioner General in writing of the transfer details within twenty-one days of the transfer.

An import of goods is an exempt import if the goods are exempt from customs duty under the Fourth Schedule of the Finance Act, 2000 (unless the Minister provides otherwise by regulation), or would be exempt if supplied in Uganda.

Generally, the taxable value of a taxable supply is the total consideration paid in money or in kind by all persons for that supply; special rules set fair market value in certain listed cases and specify treatment when tax is not separately identified and for rental agreements.

If certain events (cancellation, fundamental variation, agreed change in consideration, or returns) affect a taxable supply and cause previously reported output tax to be incorrect, the taxable person who made the supply must make an adjustment specified in subsection (3) or (4); where output tax accounted for is more than properly chargeable the excess is treated as tax charged in the period of the event; where accounted output tax exceeds proper tax the taxable person is entitled to a credit (subject to subsection (6) and restrictions where the recipient is not a taxable person).

The taxable value of an import of goods equals the sum of: (a) the customs-ascertained value of the goods; (b) customs duty, excise tax and any other fiscal charge (other than tax) payable on the goods; and (c) the value of services to which section 12(3) applies that are not included in the customs value.

Tax payable on a taxable transaction is the rate of tax applied to the taxable value; supplies in the Third Schedule have a zero rate.

The tax payable by a taxable person for a tax period must be calculated according to the formula in section 1(b) of the Fourth Schedule, subject to section 26.

Taxable persons with annual taxable supplies not exceeding 200,000,000 shillings may elect to use cash basis accounting, must make the election in writing to the Commissioner General by the due date for the first return, must account for output and input tax on a cash basis if they elect, and may not withdraw the election within two years unless they cease to be persons to whom the section applies.

Taxable persons who change their accounting basis must have any tax for the period of change calculated under this section; specific formulas apply when switching between invoice and cash bases.

Section describes when a taxable person may claim input tax credits, limits and exclusions (including entertainment and passenger automobiles), apportionment rules using the Fourth Schedule fraction B/C thresholds, the Commissioner General's discretion to allow credits without invoices, and annual reconciliation procedures.

Taxable persons must give an original tax invoice at the time of supply, keep a copy, may provide a marked duplicate if the original is lost, and must comply with requests within specified time limits; original invoices may only be provided as required.

If a previously issued tax invoice shows more tax than was proper, the supplier must give a credit note with the particulars in section 3 of the Fourth Schedule; if it shows less tax than was proper, the supplier must give a debit note with the particulars in section 4 of the Fourth Schedule.

A taxable person must lodge a tax return with the Commissioner General for each tax period within fifteen days after the end of the period; returns must be in the prescribed form and state specified amounts; the Commissioner General may require further returns from any person and may extend filing time on written application where good cause is shown.

The Commissioner General must serve a notice of assessment to the person assessed stating the tax payable, due date, explanation and how to object; the Commissioner General may estimate tax and may amend assessments within specified time limits; persons dissatisfied with their return may apply in writing within three years to alter it.

The production of a notice of assessment or a certified copy is to be received in proceedings as conclusive evidence that the assessment was duly made and, except in proceedings relating to objections and appeals, that the amount and particulars of the assessment are correct.

The Commissioner General may issue a certificate and ask immigration to stop a person leaving Uganda when there are reasonable grounds to believe they will leave without paying tax; tax is due and payable as specified and may be extended on written application if good cause is shown; payment or a Commissioner General certificate suffices to allow departure.

Tax due under this Act is a debt payable to the Commissioner General by the person specified in section 5; customs and excise law may apply to import taxes with modifications the Minister may prescribe; the Commissioner General may exercise customs powers and file a certified statement in court which is to be treated as a civil judgment.

The Commissioner General may require a taxable person who is making a taxable supply to provide security for tax payable, in an amount and manner the Commissioner General determines, when necessary for the protection of the revenue.

From when tax becomes due, the Commissioner General is entitled to a preferential claim on the taxpayer's assets against other claimants until the tax is paid.

The Commissioner General must, within ten days after seizure, serve a written notice on the owner or person who had custody or control; the Commissioner General may seize goods, may serve notices on claimants when sufficient information is provided, may authorise delivery of goods on payment or security, and may sell goods after the detention period has expired.

If a person liable for tax fails to pay within the prescribed time, the Commissioner General may lock and seal business premises and recover unpaid tax by distress against movable property; distrained property (except perishable goods) must be kept for ten days at the cost of the person liable; proceeds from sale are applied to costs, tax, then any remainder to the person liable.

The Commissioner General may, by written notice, require third parties who owe or hold money for a person liable for tax (or who have authority to pay money to that person) to pay tax; the notice date cannot be before the money is due; a copy of the notice must be sent to the person liable; payments made under the notice are treated as made under the authority of the person liable and the payer is indemnified.

Receivers must notify the Commissioner General in writing within fourteen days of appointment or taking possession, set aside notified amounts from sale proceeds, and may not dispose of assets without prior written permission; Commissioner General may notify amounts; receivers may pay higher-priority debts and are personally liable for amounts not set aside if they fail to comply.

If a taxable person's input tax credit exceeds their tax liability for a tax period, the Commissioner General must refund the excess (within one month) or may offset or must offset it against future liability depending on the amount; persons may claim refunds within three years and must provide records within seven days when requested.

If a taxable person obtained a refund for tax on a bad debt and later recovers payment, the taxable person must remit the portion of that recovery representing the refunded tax to the Commissioner General with the next tax return; failure by a registered supplier to do so is an offence carrying a fine up to five hundred thousand shillings plus payment of tax and a penal tax.

The Commissioner General must pay interest (5 percentage points above the Bank of Uganda official rate) on tax refunds arising from a Tax Appeals Tribunal decision or delayed refunds; if, after investigation, an input tax excess exceeds not less than fifty thousand shillings, no interest is payable under the delayed-refund rule.

The Minister may authorise refunds of tax for certain diplomats, missions and international organisations (with concurrence of the Minister of Foreign Affairs); the Commissioner General may prescribe claim form and timing; the Minister may make regulations on conditions for refunds.

Persons liable for tax must keep specified invoices, notes, customs documents and other records in Uganda in English, and records must be kept for at least six years after the related tax period.

The Commissioner General, or an authorised officer, may access premises, inspect, copy and seize books, records or computers during normal working hours without prior notice; officers need written authorisation and must produce it on request; occupiers must assist; persons whose material is retained may inspect and copy under supervision.

The Commissioner General may issue a written notice requiring any person to provide information, attend for oath examination, and produce books or records; notices must be served by signed copy delivered by hand or left at the person’s last usual business or abode, and the certificate of service is evidence.

If a book or record referred to in sections 47 or 48 is not in English, the Commissioner General may require the person who keeps it to provide, at that persons expense, an English translation by a translator approved by the Commissioner General.

The Commissioner General must issue a taxpayer identification number to every taxpayer and may require persons to show that number in returns, notices or other documents for this Act.

A person who fails to apply for registration, notify the Commissioner General of a change in circumstances, or apply to cancel registration (as required by the cited sections) commits an offence and, on conviction, faces fines or imprisonment.

It is an offence to provide a tax invoice, credit note or debit note otherwise than as allowed by sections 29(1) or (6) and 30, and a taxable person who fails to provide those documents also commits an offence with specified fines or imprisonment.

Persons required to lodge a return must do so within fifteen days; failing to do so is an offence punishable by a fine up to 300,000 shillings or up to six months' imprisonment or both; after conviction continued failure attracts a daily fine of 50,000 shillings and three months' imprisonment without the option of a fine.

A person who fails to comply with a notice under section 40 or the requirements of section 41 commits an offence punishable by a fine up to five hundred thousand shillings, imprisonment up to two years, or both; the court may also order payment to the Commissioner General of the unpaid amount under section 40.

A person who fails to keep proper records under this Act commits an offence and on conviction faces penalties: if deliberate or reckless, up to Shs 500,000 or up to 2 years' imprisonment or both; otherwise up to Shs 300,000 or up to 6 months' imprisonment or both.

A person who fails to provide the Commissioner General or authorised officer with all reasonable facilities and assistance as required under section 47 (3) commits an offence and may be fined up to three hundred thousand shillings or imprisoned for up to six months, or both.

A person who fails to comply with a notice issued under section 48 or 49 commits an offence and is liable on conviction to a fine not exceeding three hundred thousand shillings or to imprisonment for a term not exceeding six months or to both.

Knowingly using a false taxpayer identification number on a tax return or document is an offence punishable by a fine up to five hundred thousand shillings or imprisonment up to two years, or both; it does not apply where the other person's TIN was used with their permission for their tax affairs.

A person must not knowingly or recklessly make to an officer of the Uganda Revenue Authority a statement that is false or misleading in a material particular, or omit material matters so that a statement is misleading.

A person must not obstruct the Commissioner General or an authorised officer performing duties under this Act; doing so is an offence punishable by a fine up to five hundred thousand shillings or imprisonment up to two years, or both.

Prohibits officers and others from requesting, receiving, offering or agreeing to improper payments or agreements that defraud tax revenue or interfere with duties.

When a company commits an offence, any person who at that time was a nominated officer (such as director, general manager, secretary or similar) or was acting in that capacity is deemed to have committed the offence, subject to specified exceptions.

An officer authorised in writing by the Commissioner General may appear in court for the Commissioner General, may conduct prosecutions (subject to the Attorney General's directions), and for that purpose has the powers of a public prosecutor under the Magistrates Courts Act.

The Commissioner General may compound certain offences by ordering payment (not exceeding the prescribed fine) before court proceedings, but may only do so if the person admits the offence in writing; once compounded the person is not liable to prosecution or penal tax under section 65.

Specifies penal tax consequences for failures such as not lodging returns on time, not applying for registration, not paying tax on time, failing to maintain records, and refund rules where underlying tax is refunded.

The Commissioner General may remit penal tax (except under section 65) when good cause is shown in writing; must refund penal tax if paid and prosecution is instituted under certain sections; and must assess penal tax like the related output tax.

The Commissioner General may refer a taxpayer’s case to the Minister if the tax cannot be effectively recovered for reasons such as hardship or excessive cost; the Minister may then remit or write off the tax in whole or in part if satisfied.