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VALUE ADDED TAX ACT.

ARRANGEMENT OF SECTIONS

   Section.

PART I
PRELIMINARY.

   1.   Interpretation.

   2.   Interpretation of fair market value.

   3.   Interpretation of associate.

PART II
CHARGE OF TAX.

   4.   Charge of tax.

   5.   Person liable to pay tax.

PART III
TAXABLE PERSONS.

   6.   Taxable person.

   7.   Persons required or permitted to register.

   8.   Registration.

   9.   Cancellation of registration.

PART IV
SUPPLIES OF GOODS AND SERVICES.

   10.   Supply of goods.

   11.   Supply of services.

   12.   Mixed supplies.

   13.   Supply by agent.

   14.   Time of supply.

   15.   Place of supply of goods.

   16.   Place of supply of services.

   17.   Imports.

PART V
TAXABLE SUPPLIES.

   18.   Taxable supply.

   19.   Exempt supply.

   20.   Exempt import.

   20A.   

PART VI
TAXABLE VALUE.

   21.   Taxable value of a taxable supply.

   22.   Adjustments.

   23.   Taxable value of an import of goods.

PART VII
CALCULATION OF TAX PAYABLE.

   24.   Calculation of tax payable on a taxable transaction.

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

   26.   Cash basis accounting.

   27.   Consequences of a change in accounting basis.

   28.   Credit for input tax.

   29.   Tax invoices.

   30.   Credit and debit notes.

PART VIII
PROCEDURE AND ADMINISTRATION OF TAX.

Returns and assessments.

   31.   [Repealed.]

   32.   [Repealed.]

   33.   [Repealed.]

   33A.–40.   [Repealed.]

Collection and recovery of tax.

   41.   Duties of receivers.

Refund of tax.

   42.   Refund of overpaid tax.

   43.   Refund of tax for bad debts.

   44.   Interest on overpayments and late refunds.

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

Records and investigation powers.

   46.–64.   [Repealed.]

Offences and penal tax.

   65.   Penal tax.

   66.   Recovery of penal tax.

   67.   Remission of tax.

PART IX
GENERAL PROVISIONS.

   68.–70A.   [Repealed.]

   71.   Application of Act to partnerships and unincorporated associations.

   72.   Trustee.

   73.   Currency conversion.

   74.   Prices quoted to include tax.

   75.   Schemes for obtaining undue tax benefits.

   76.   International agreements.

   77.   Priority of Schedules.

   78.   Regulations and amendment of Schedules.

   79.   [Repealed.]

   80.   [Repealed.]

   81.   International agreements.

 

      First Schedule   Public international organisations.

      Second Schedule   Exempt supplies.

      Third Schedule   Zero rated supplies.

      Fourth Schedule   Formulae, tax invoices, credit notes and debit notes.

      Fifth Schedule   Calculation of interest penalty.

 

CHAPTER 349
VALUE ADDED TAX ACT.

Commencement: 1 July, 1996.

   An Act to provide for the imposition and collection of value added tax, and for other purposes connected to that tax.

 

PART I
PRELIMINARY.

 

1.   Interpretation.

   In this Act, unless the context otherwise requires—

   (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

   (c)   the supply of imported services other than an exempt service by any person.

 

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

   (c)   a person engaged in commercial farming.

   (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

   (c)   of a material nature in business activities or in the nature of taxable supplies being made,

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—

   (a

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