Business Tax FAQs
Stamp Duty is amount of money (duty) payable on every document that confers/gives any right or liability upon being created, transferred, limited, extended, extinguished or recorded.
These documents are referred to as instruments and they are listed in the Stamp Duty Act as amended and the duty rates specified therein
The Digital Tracking Solution (DTS) is a track & trace platform that sends production and importation data for specific products immediately, to both Uganda Revenue Authority (URA) and Uganda National Bureau of Standards (UNBS).
The Digital Tracking Solution involves the stamping of products with a digital stamp for tax purposes (URA) and conformity Stamps – for safety standards certification (UNBS).
What is a Formal Business?
A formal business is one that has registered with Uganda Registration Services Bureau (URBS) and obtained a business or Company name, registered for taxes with URA and obtained a Tax Identification Number (TIN) and has secured permission to trade in any desired area/place through obtaining a trading license.
Note: If your business is not registered by these agencies, then you are informal.
What are business records?
A business record is a document that shows transactions that a business has carried out in a given period. The record can be on physical paper or in electronic form or both. It should be kept for 5years (or more if the records are needed for ongoing proceedings by URA). All businesses must keep records in an organized way with satisfactory details of their operations. These records also provide details to determine your tax obligations and entitlements.
If the records are not in the English language, you are required to translate them at your cost. Otherwise, you need the permission of the commissioner to keep your records in any other language.
What tax registration requirements must I fulfil?
A person liable to pay tax shall apply to the Commissioner for registration in the prescribed manner. Upon registration, a person (individual or non-individual) shall be issued with a Taxpayer Identification Number (TIN). Every person registered for taxes is required to state their TIN on any return, notice, communication or any other document furnished, lodged or used for the purposes of a tax law. A TIN contains 10 numeric digits e.g. 1000223947.
What is a small business?
A Small Business Taxpayer for income tax purposes is a resident taxpayer whose gross turnover from all businesses owned by such a person in a year is above 10 MILLION shillings but is less than 150 MILLION shillings. The term TURNOVER refers to one’s total sales in a year. The legislation is provided for in Part II Section 4(5) and the Second Schedule of the Income Tax Act Cap 340.
Read More: KEY FINANCIAL MANAGEMENT SKILLS FOR SMALL BUSINESSES
TAXPAYER REGISTRATION STARTER PACK
Vol. 1, Issue 3
FY 2022-23
Dear Esteemed Client,
Thank you for registering for taxes. We promise you a great experience as you embark on this journey of fulfilling your tax obligations.
OUR VALUE PROPOSITION
We promise simplified, timely, reliable and convenient revenue services everywhere at a minimum cost to you.
What is Voluntary Disclosure?
Voluntary disclosure is a process where the taxpayer discloses information related to tax liabilities, misstatements or omissions his or her tax declarations to Uganda Revenue Authority (URA) without being prompted by any action or threat of action by URA.
Such actions include; initiation of a tax investigation, a request for tax information, a tax advisory letter, a tax health check/review, a Notice of audit, a tax query or compliance visit by URA officers.
Voluntary Disclosure also covers persons engaged in income generating activities who are not yet registered or whose registration details are inaccurate. Those who voluntarily register for taxes can apply and will be required to pay only the principal tax due for the period of their noncompliance.
What is withholding tax?
Withholding tax (WHT) is a form of income tax that is withheld at source by one person (withholding agent) upon making payment to another person (payee). This tax is deducted at source and remitted to URA in advance by the withholding agent.
The law stipulates the persons who are required to withhold the tax and the persons from whom the tax is withheld. This depends on the nature and the circumstances of the transaction.
TRANSITION TO THE NEW LOG BOOK (VALIDATION OF MOTOR VEHICLE PARTICULARS)
What is validation of a motor vehicle
To validate your motor vehicle means to re-capture your vehicle particulars on the hard paper log books into the system so as to be given the new A4 log books.
Issuance of the new A4 log books commenced
Introduction
What is EFRIS?
EFRIS in full is Electronic Fiscal Receipting and Invoicing Solution. EFRIS is an initiative under the Domestic Revenue Mobilization Program whose aim is to address the tax administration challenges relating to business transactions and issuance of receipts.
It is a new smart business solution used to record business transactions and share the information with URA in real time (concurrently). It involves the use of e-Invoicing through the URA web portal and direct communication with business transaction systems (system to system connection), electronic Fiscal Devices (EFDs) and Electronic Dispenser Controllers (EDCs) to manage the issuance of e-receipts and e-invoices.
What is hotel and accommodation sector?
The hotel and accommodation sector is a branch of hospitality industry that involves establishments that provide travelers with shelter/lodging, food, refreshments, and recreational services like entertainment, and personal services on a commercial basis.
What is a hotel?
The Income tax Act defines an approved hotel as an industrial building licensed by the appropriate authorities for use, at a price, for boarding and lodging with at least;
- Ten bedrooms with minimum facilities of bed and breakfast, toilet and bath or shower room; and
- Restaurant or dining room for provision of food and beverages
These can include resorts hotels/suites, apartment
What is a small Business?
This is a business that makes total sales between Ugx 10,000,000 and 150,000,000 in a year. This business should at least make sales of Ugx 27,500 in a day.
What is tax on small businesses?
This tax, also known as presumptive tax is charged by Uganda Revenue Authority from operators of small businesses.
Who pays this tax?
This tax is paid by the owners of small businesses.
Does every owner of a business in this sales category pay this tax?
No. professionals for example persons in dental, medical, engineers, accountants, and architectural practice among others do not pay this tax.
TOURISM AND TOUR OPERATIONS SUB SECTOR OVERVIEW
What is tourism?
Tourism involves the short-term movement of people to destinations outside the places where they normally live and work. It also involves the activities of people who travel for recreation, holiday, business, sports and leisure activities.
When am I considered a player in the tourism sector in Uganda?
You’re considered a player in the tourism sector if you operate tourism sights/destinations, accommodation, food service activities, tour operations, travel agency, arts and culture sectors.
What does transport sector consist of?
The transport sector in Uganda is divided into four modes. i.e. Air, Road, Water and Rail.
How do I register my transport business?
All businesses in the transport sector in Uganda are required to be registered with
- Ministry of Works and Transport for permits and licenses
- Uganda Revenue Authority (URA) for taxes
- Local council authority e.g. KCCA, municipal council, for a trading license
Who is a VAT registered taxpayer?
This is a business that makes total sales above Ugx 150,000,000 in a year and deals in taxable supplies.
If you run any business in this category and are not yet registered, you’re advised to register for VAT.
What is wholesale trade?
Wholesale trade is the buying of goods in large quantities and selling them to the retailer in relatively large quantities.
Wholesalers sometimes sell goods directly to final consumer in small quantities.
What is retail trade?
Retail trade is the buying of goods from wholesalers or distributors and selling them to final consumers in small quantities.
According to the law, a tax agent is an individual, partnership, or company who has been approved and licensed following a successful application, reviewing, vetting and awarding of a certificate of registration to become a tax agent by the Tax Agents Registration Committee.
Click HERE to read more
Click HERE to view how to Register as a Domestic Tax Agent
Service Description
This is a process initiated by the client to the URA commissioner, to be certified as being compliant with their tax obligation with URA. The client receives a tax certificate from URA confirming that a person’s tax affairs are in order at the date of issue of the Certificate.
What is a Tax Clearance Certificate (TCC)?
It is tool used to compel non-compliant taxpayers to comply with provisions of registration, filing of returns and payment of taxes. A TCC certifies to a third party that the stated taxpayer is compliant i.e. has fulfilled their obligation of paying taxes.
Laws Applicable
Section 134 of the Income Tax Act Cap 340 provides that any person who requires a Tax Clearance Certificate shall apply to the Commissioner for the certificate as proof of tax compliance.
Persons (tax payers) who require TCCs include those:
- Providing passenger transport services
- Providing freight transport service where the goods vehicle used has a load capacity of more than 2 tons
- Providing ware housing or clearing and forwarding services
- Supplying goods or services to the Government or
- Transferring funds in excess of 2,500 currency points from Uganda to a place outside Uganda
- Who may wish to obtain certificates as evidence of their tax compliance
This is a tool that helps a taxpayer ascertain their tax liability. This calculator can be used to arrive a tax payable of the selected tax heads.
Click here for your motor vehicle import duty
Chick here for your Pay As You Earn (PAYE)
Chick here to calculate for VAT
This is a process where a taxpayer reports accurately, correctly and in completeness all tax obligations according to the tax laws to Uganda Revenue Authority in a prescribed format within a specified period.
Expected Delivery Time and Cost
Expected Delivery Time
URA will send an Auto notification of receipt of your return declaration upon submission.
Cost of the Service : FREE
Who is Eligible to File a Return?
The following are eligible for return filing.
- Every tax payer who has chargeable income other than a resident individual whose chargeable income is below the thresh hold.
- In case of resident company, a return should be filled for all global income.
- Partnership
Please Note:
The following are persons who are not expected to file tax returns;
- A non-resident whose income is derived from sources within Uganda and is subjected to withholding tax as a final tax e.g. International payments or payments to non-resident public entertainers, sports persons, contractors or professionals.
- A resident individual whose gross income consists exclusively of employment income derived from a single employer and from which tax has been withheld under the PAYE system.
- A resident individual whose total chargeable income for the year of income is below the stated threshold in the income tax Act.
What is a Return?
A return is a declaration of transactions that took place during a particular period for purposes of ascertaining the tax position for that period.
Who is required to file a return?
All persons with income exceeding 2,820,000 a year, save for employees who earn income from only employment and with one employer.
When is a return supposed to be filed?
- Annual returns i.e. Income Tax, within six (6) months from the end of the financial period e.g. taxpayers with 30th June as the accounting date, the deadline to file returns is 31st December every year.
- Monthly Returns i.e. VAT, WHT, PAYE, LED it is the 15th day of the month following the return period
- Weekly Return i.e. Gaming and Lotteries returns, by Wednesday of every week.
What can I do if am running out of time to file a return?
You can apply for an extension to seek permission to file a return late however the extension cannot exceed an aggregate of 90 days. This extension shall not change the due date of payment of tax due for that period.
What do I need to file a return?
All the information required to file that particular return. E.g. for VAT you need all purchase and Expenses and Sales (Including all taxable and exempt sales) transactions. Including those transactions where VAT has not been charged or incurred.
What is an assessment?
An assessment is any decision of the commissioner which, under this Act, is subject to objection and appeal. An assessment includes;
- The ascertainment of the chargeable income of the taxpayer and the tax payable thereof for that year of income and it includes a deemed assessment.
- The ascertainment of the rental income of a taxpayer and the amount of tax payable thereof.
- The ascertainment of the amount of penal tax payable by a person.
Types of assessments
There are two types of assessments.
- Self-Assessments. This is a self-declaration of the tax payable made by a tax payer through filing a return, including one with a nil amount.
Self-assessment returns include the following:
- An Income Tax return;
- A Rental income return;
- A VAT return;
- An Excise Duty return;
- Any other self-assessment return under the tax law.
- Administrative Assessments representing notices of assessment for tax served by the commissioner.
Under Administrative assessment we have;
- Default assessment.
Is a declaration issued by the authority to the taxpayer when he/she fails to furnish a self-assessment return for any given tax period as required by the tax law.
- Advance Assessment;
This assessment is issued if the Commissioner general is satisfied that there is a risk that a taxpayer may delay, obstruct, prevent, or render ineffective payment or collection of tax that has not yet become due.
- It may be made before the date on which the taxpayer’s tax return for the period is due.
- The assessment can be issued if a taxpayer defaults in submitting an advance return when requested by the CG. However the CG can also issue this assessment without notice.
- This assessment can be objected to and can also be amended.
- For Default or Advance assessments, the taxpayer’s return for the tax period shall be accepted if filed, and the return shall take precedence over the assessment.
- Additional Assessment
This is an assessment amending a tax assessment made for a tax period to ensure that the taxpayer is assessed in respect of the correct amount.
(2) An additional assessment under subsection (1) may be made;
(a) at any time, if fraud or any gross or willful neglect has been committed by , or on behalf of the taxpayer, or new information has been discovered in relation to the tax payable by the taxpayer for a tax period;
(b) in the case of an additional assessment, within three years from the date of service of the notice of the additional assessment; or
(c) in any other case, within three years after the date;
- the taxpayer furnished the self-assessment return to which the original assessment relates; etc
Either of these can lead into a discharge or additional assessment. Every assessment should be printed, filed and a copy sent to the taxpayer. Assessments may be physically delivered, posted, or emailed (legally delivered).
- Amended Assessment.
This is an assessment given to correct an error made before the expiry of 2 years from the making or issuing of the assessment requiring amendment.
This is a process where Diplomats /Diplomatic missions claim a refund of money paid as VAT on all their expenses made in Uganda.
Such a refund is given to only the privileged persons and these include; Diplomats, Diplomatic missions e.g. embassies and entities listed in the first schedule of the VAT Act.
Read More: DIPLOMATIC VAT REFUND & others-service catalogue
Step by step on how to apply for a Diplomatic VAT refund
PLEASE NOTE: The process for diplomatic refund starts by the diplomatic mission filling a
diplomatic VAT return.
File a return online using return template: DT-2032. (Follow step by step of filling a diplomatic return)
Step by step on How to Apply for refund of withholding, PAYE, individual and
corporation tax
Use the following guide to apply for a refund for the above use the following guide
Step 1:
At the home page (ura.go.ug)
Click on download manual forms under the menu you don’t need to login to;
What is objection?
An Objection is a communication in writing from a taxpayer to the Commissioner/Commissioner General expressing dissatisfaction with a tax decision within forty five days after receipt of notice of a tax decision.
An objection shall be in the prescribed form and shall state the grounds upon which it is made and must contain sufficient evidence to support it.
Who is required to do it?
A taxpayer who is dissatisfied with a tax decision issued by the authority
Why should one object?
What is a refund?
Refund is a repayment, reimbursement or compensation
A tax refund is the difference between taxes paid and taxes owed. This may be as a result of taxes paid in error or in excess of tax assessed or due.
Refund Process
This is a process where a taxpayer claims money that was over paid to URA as tax.
Why you would apply for a Tax Refund
The process provides you with an opportunity to use the refunded money to offset a tax liability for any other tax head.
The refunded money can be used to increase the cash flow in your business operations.
What is a refund?
Refund is a repayment, reimbursement or compensation
A tax refund is the difference between taxes paid and taxes owed. This may be as a result of taxes paid in error or in excess of tax assessed or due.
Refund Process
This is a process where a taxpayer claims money that was over paid to URA as tax.
Create Step by Step guides for;
- TIN Registration-
- INDIVIDUAL
- Limited Company
- Partnership
- Diplomatic Missions
- Government Institutions and Funded Projects
- Local Authorities
- NGOs and CBOs
Step by step guide for VAT Refund Process
Step 1:
Go to https://ura.go.ug
- It enables the taxpayer to effect all URA taxes such as Income Tax, VAT, and duties such as Stamp Duty, Customs Duties among others.
Please Note:
- You may register a payment at your convenience; one does not need to go to a URA service center.
- You are free to select a bank of your choice from the list provided on the URA web portal.
- You can change payment to the bank of your preference at any time.
- You can correct any error in the payment details by printing another pay slip using the re-registration functionality.
- You can register and make a payment even if you do not have a TIN.
- You can make installment payments for a tax liability ‘But’ you must agree with your tax office on the Installment payments. Non-individuals remit provisional tax in two half year installments and individuals remit provisional tax in four quarterly installments. This also applies to Rental Tax.
Caution
- URA payments do not include bank charges and must be specific on the mode of payment, i. e, Cash, Cheque, among other provisions.
- The client can only register a payment for a single Item at a time
- On registering a payment, a copy of the slip is always sent to the registered email of the client.
- One does not need a URA bank account number to make a payment.
- All payments must be done in Uganda shillings any other currency should be converted using the URA exchange rate as provided on the URA web portal.
- A payment should be tagged to a particular item, e.g. Tax head, NTR transaction, ONTR among others and Tax payer.
- The figure put in the field of amount should neither have commas nor decimals.
- A payment registration number once generated is valid for 21 days
- Where a TIN is used when registering a payment, the client must confirm the details auto populated in the different fields belong to that TIN.
Payment Requirements
- The taxpayer must be specific on the mode of payment, i. e, Cash, Cheque among other provisions.
- Where a TIN is used when registering a payment, the taxpayer must confirm the details auto populated in the different fields belong to that TIN.
- A payment registration number once generated is valid for 21 days.
- A taxpayer is free to select a bank of their choice from the list given on the URA web portal.
- The figure put in the field of amount should neither have commas nor decimals.
- All payments must be done in Uganda shillings any other currency should be converted using the URA exchange rate as provided on the URA web portal.
- On registering a payment, a copy of the slip is always sent to the registered email of the taxpayer.
- A taxpayer who fails to pay up his/her tax liability by the due date, there will be an automatic imposition of interest at the configured rates.
- Payments should be done within 45 days in case of service of an assessment.
The type of Payment Registration information for the different persons includes:-
- Payment by Tax Head
- Payment for Non-tax revenue (NTR) e.g. drivers permit etc.
- Payment for Other non- tax revenue payments (ONTR) like for passport or police express penalty
- Payment Re-Registration
- Payment for presumptive tax
- Payment for advance Income tax on motor vehicle
- Instalment payment of taxes
Service Description
This is the process for registering a payment for a tax type e.g. Income Tax, VAT, Excise duty, Withholding tax, Gaming and Pool Betting tax etc. on the URA Portal.
Please Note:
Automatic Compliance for Non Payment or Late Payment
Compliance means adherence to provisions of the Law. If the taxpayer is not making payment before or on the due date then interest will be imposed on unpaid amount. Automatic compliance for non-payment or late payment will be applicable to Domestic taxes mentioned below;
- Income Tax
- VAT
- Excise Duty
- GPBT
A person who fails;
- to pay any tax, including provisional tax;
- to pay any penal tax; or
- to pay to the Commissioner any tax withheld or required to be withheld by the person from a payment to another person, on or before the due date for payment, is liable for interest at a rate equal to two per cent per month on the amount unpaid calculated from the date on which the payment was due until the date on which payment is made. Interest charged shall be compound interest except for income tax where simple interest is charged.
Due date of payment is decided based on following
- In case of self-assessment; this will be the same as due date for providing the return.
- In any other case; within 45 days from the date of service of the notice of assessment.
- In case taxpayer has lodged a notice of objection to an assessment, the amount of tax payable by the taxpayer pending final resolution of the objection is thirty per cent of the tax assessed or that part of the tax not in dispute, whichever is greater. However, the Commissioner may waive the amount or accept a lesser amount than is required to be paid in a case an objection has reasonably been made to an assessment. Interest shall be imposed on amount of tax payable.
- Permission to pay tax due by installments does not prevent a liability for interest arising on the unpaid balance of the tax due.
Cost for the service
Free of charge
Where to get the service
All URA service offices
Expected Delivery Time
We shall acknowledge receipt of your payment registration “INSTANTLY” upon submission in form of a Payment Registration Slip containing a unique number.
User guide
Step by step guide for how to register a Payment by Tax Head
Step by step on How to register a payment on the web portal
Test CRM FAQ
Simply visit the CRM home page here ..
Trying that
Well Pong
A Single Customs Territory is the full attainment of the Customs Union achievable through removal of trade restrictions including minimization of internal border controls.
It is about achieving free circulation of goods in the Customs Territory in order to reduce the cost of doing business.
The following are the features of the SCT
- Goods are cleared at the first point of entry;
- One Customs declaration is made at the destination country
- Taxes are paid at the point of destination when goods are still at the first point of entry;
- Goods are moved under a single Regional bond from the port to the destination;
- Goods are monitored by an electronic cargo tracking system;
- Interconnected Customs systems;
- Minimized internal controls/checks
The SCT commenced on 1st January 2014 as a pilot on the Northern Corridor (Kenya,\n Uganda, Rwanda). The pilot on the Central Corridor (Tanzania, Burundi) commenced in\n April 2014.
As at September 2017;\n
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- All intra Region trade cargo moving within the EAC partner states is cleared under the SCT procedures.
- For Maritime Cargo, SCT has been rolled out for selected goods, full roll out at the ports of Mombasa and Dar-es-salaam planned for November 2017.
- Rwanda has achieved full roll out of the SCT
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The benefits of SCT include;\n
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- Reduced turnaround time for transporters.
- Reduced clearance time.
- Reduced the cost of doing business.
- Reduced administrative costs and regulatory requirements.
- Reduced the risks associated with non-compliance on the transit of goods;
- Enhanced trade in locally produced goods.
- Enhanced the relationship between the private and public sectors;
- Minimizes smuggling at a regional level;
- Efficient revenue management;
- Enhanced application of Information Technology and data collection at the regional level.
- Synergy through shared resources and utilization of economies of scale.
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The EAC Partner States – Burundi, Kenya, Rwanda, Tanzania, Uganda and South Sudan
Revenue Authorities have deployed officials to the first points of Entry to facilitate the smooth operations of the SCT. URA has deployed officers at Port of Mombasa, different locations in Nairobi, Nakuru, Eldoret, Kisumu, and Port Of Dar es salaam.”
The key stakeholders involved in the SCT include:\n
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- Importers and exporters
- Customs Agents
- Transporters
- Bonded warehouse owners
- Container Freight Stations (CFSs)
- Ports Authorities
- Shipping Line Agents
- Insurance Companies
- Other Government Agencies e.g. standards Bureaus
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Yes, Key stakeholders must fulfill some requirements to be able to smoothly transact under the SCT clearance procedures.
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Importers & Exporters
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- Appoint a licensed clearing agent/or get licensed for own clearance
- Develop a working relationship with shipping line agents
- Knowledge on SCT process and documentation
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Customs/Clearing Agents
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- Acquire license from respective Revenue Authorities
- Execute a Regional Bond Guarantee
- Register with Port Authorities
- Develop a working relationship with shipping line agents
- Acquire knowledge in SCT & training in other Revenue Authorities Customs systems
- Acquire access rights in the other Revenue Authorities Customs systems.
- Sensitize their clients
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Transporters
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- Acquire Transit License from the respective Revenue Authorities
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Customs/Clearing Agents involved in the clearance process may choose to operate under the Mutual Recognition of Customs Agents and/or relocate to the First points of Entry (Dar es Salaam, Mombasa)\n
Note: those who wish to operate businesses in other Partner States must meet the legal requirements for business registration
Customs/Clearing Agents that are licensed by one Partner state are recognized in the other Partner states and are granted access rights to operate in the respective Customs Systems to facilitate the clearance of cargo destined to and from their respective countries.
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