Wakilii

Ernst and Young v Uganda Revenue Authority (Civil Appeal No. 26 of 2022)

High Court · [2026] UGCOMMC 305 · 2026 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from Tax Appeals Tribunal ruling dismissing application challenging VAT assessment
Decision
Appeal dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court dismissed the appeal, holding that Ernst and Young, a taxable person, imported services from non-resident entities which it consumed in Uganda and was therefore liable to account for VAT on those imported services under sections 4(c) and 5(c) of the Value Added Tax Act. Section 16(2), which governs place of supply for services to non-taxable persons, was inapplicable where the recipient is a taxable person. The existing VAT legislative framework on imported services is sufficiently clear and does not require specific criteria for digital services.

Outcome

Appeal dismissed with costs to the respondent

Facts

Ernst and Young, a partnership registered in Uganda and member of the Ernst and Young Global Network, procured information technology and other services from non-resident entities including Face Technology PTY Limited, Dimension Data Pty Limited, Ernst and Young Global Services Limited, and Ernst and Young (EMEIA) Services Ltd. Uganda Revenue Authority assessed VAT of UGX 3,482,492,210 for the period January 2014 to June 2018 on grounds that the appellant imported services. The appellant objected, arguing the supplies did not take place in Uganda. URA upheld the assessment. The Tax Appeals Tribunal dismissed the appellant's application, holding the services were imported and VAT was payable. The appellant declared and paid withholding tax on payments to non-resident service providers but made no VAT declaration or payment on the imported services.

Issues

  1. Whether the appellant imported the impugned services into Uganda for VAT purposes.
  2. Whether services imported for income tax purposes should be considered imported for VAT purposes.
  3. Whether there was evidence that services procured by group companies were consumed by EY(EMEIA) Services Limited and EY Global Services Limited.
  4. Whether section 16 of the Value Added Tax Act applies to determine the place of supply for services received by a taxable person from a non-resident supplier.
  5. Whether there is sufficient legislative criteria for taxing digital/electronic imported services under the VAT Act.

Orders

  • Appeal dismissed.
  • Costs awarded to the respondent.

Rules and key headnotes

Value Added Tax — Imported Services — Definition and Characterisation
Imported services involve a supply of services made by a supplier who is resident or carries on business outside Uganda to a recipient who is a resident of or carries on business in Uganda to the extent that such services are utilised or consumed in Uganda.
Value Added Tax — Place of Supply — Section 16(2) Inapplicability to Taxable Persons
Section 16(2) of the Value Added Tax Act, which governs the place of supply of services by non-resident suppliers, applies only where the recipient is a non-taxable person. Where the recipient is a taxable person, the supply of services by a person carrying on business outside Uganda is properly characterised as an imported service and section 16(2) is inapplicable.
Value Added Tax — Destination Principle — Consumption as Basis for Taxation
VAT is a destination-based tax; goods and services are taxed at the place where they are consumed and not at the origin. Where a taxable person in Uganda consumes services provided by foreign entities and pays consideration for the same, the services are imported into Uganda for VAT purposes.
Value Added Tax — Imported Services — Distinction from Taxable Supplies under Section 18(9)
Section 18(9) of the Value Added Tax Act, which treats supplies of services by foreign persons as taxable supplies where the services are considered as taking place in Uganda under section 16, does not apply to imported services. The provision applies to foreign persons making taxable supplies to non-taxable persons within Uganda, not to services imported by taxable persons.
Tax Appeals — Scope of Appeal — Questions of Law Only
Under section 28(2) of the Tax Appeals Tribunal Act, an appeal to the High Court may be made on questions of law only. Grounds of appeal that involve examination of evidence adduced at trial deal with questions of fact and not law, and therefore offend the provisions of section 28(2).
Value Added Tax — Legislative Framework — Sufficiency of Existing Provisions on Imported Services
The existing provisions of the Value Added Tax Act on imported services are sufficiently clear. The absence of detailed criteria for identifying and monitoring digital imported services does not negate the existence of a valid legislative framework. Services cannot be subject to customs or border controls in the same manner as goods, and Regulation 13(1) of the VAT Regulations provides clear timing rules for accounting for imported services.

Legislation cited (12)

Cases cited (6)

  • Africa Broadcasting (U) Limited v Uganda Revenue Authority (Civil Appeal No. 52 of 2020)
  • Mix Telematice East Africa Limited v Uganda Revenue Authority (TAT Application No. 4 of 2018)
  • Uganda Revenue Authority v COWI A/S (Civil Appeal No. 34 of 2020)
  • Apollo Hotel Corporation Ltd v Uganda Revenue Authority (Civil Appeal No. 48 of 2022)
  • Vodacom Business Nigeria Limited (Vodacome) vs Federal Inland Revenue Service (FIRS) CAL/556/2018
  • Nile Breweries Limited v Uganda Revenue Authority and Others (Civil Appeal No. 14 of 2022)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Ernst and Young v Uganda Revenue Authority (Civil Appeal No. 26 of 2022) [2026] UGCommC 305 (11 June 2026)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.