Section 9: Any other benefit - The benefit

is the market value of the benefit less any payments by the employee 12.2.4 Employee's Relief This refers to gains or income that is not included in the chargeable income of the em- ployee and therefore not taxable on the employee: a. The employee's income that is below the taxable threshold, currently at Shs. 235,000 per month b. Pension c. Discharge or reimbursement of medical expenses actually incurred by the employee d. Life insurance premiums paid by a taxable employer (company individual) for the benefit of the employee e. Expenses incurred by the employee; discharge or reimbursement for the employee on official duty of the employer f. Meals and refreshments or value thereof provided to all employees at equal terms g. Employer's contribution to a retirement fund for the benefit of the employee h. Any non-cash benefits whose value is less than Shs. 10,000 a month i. Relief of 25% on terminal benefits for employees who have served the employer for at least 10 years j. Passage costs k. The employment income of an expatriate employee in a listed Institution, under a technical assistance agreement subject to the Minister's approval l. Official employment income of persons employed in the armed forces, Uganda Police Force and Uganda Prisons. It however excludes persons serving there in civilian ca- pacity m. Employment income of a prosecutor in the Office of the Directorate of Public Prose- cution ("ODPP") n. Employment income of persons employed by East African Development Bank (EADB) 12.3 Property Income Property Income is defined in the Income Tax Act as; a. Any dividends, interest, natural resource payments, rents, royalties and any other pay- ments derived by a person from the provision, use or exploitation of property b. The value of any gifts derived by a person in connection with the provision, use or exploitation of property c. The total amount of any contribution made to a retirement fund during a year of in- come by a tax exempt employer d. Any other income derived by a person but does not include an amount which is busi- ness, employment, or exempt income e. Any amount included in business income of the person under any other section of the Income Tax Act 12.4 Exempt Income Certain incomes by law are not taxed and they are referred to as exempt income. Exempt income is listed in section 21 of the Income Tax Act. PART B 1.0 TAX REGISTRATION URA, through its modernization process improved the registration process through pro- viding online services on a 24-hour basis. The registration process enables taxpayers to obtain a Taxpayer Identification Number (TIN). A person liable to pay tax under a tax law or any person engaging in any business generating income in Uganda is required to have a TIN. 1.1 Tax Identification Number (TIN) A TIN is an identifying number used for tax purposes in Uganda; t is one's personal ac- count with URA and it can be obtained through any of the following processes; Through the URA Web portal: i. Visit the URA web portal - https//ura.go.ug ii. Download the appropriate registration form (Individual or Non Individual), iii. Complete the form by filling in the mandatory fields (boxes) iv. Upload and submit online the completed form v. Print a copy of the form and sign it off and together with the necessary attach- ments submit to the nearest URA office. vi. Receive an acknowledgment notice of approval of TIN Visiting a URA designated office In case a tax payer cannot register online, he or she can walk into any of the URA offices or One Stop Centre located in any of the Municipality or KCCA division and assistance shall be provided to complete the registration process. Ensure that you move along with the necessary attachments. In case of failure to do any of the above, call: (Toll free) 0800117000/0800217000 / or WhatsApp 0772140000 or send an email to [email protected]. On approval of the application, the taxpayer will receive a notice containing the TIN and a default password to enable him/her log into their URA Account on the web portal. This will enable him/her create his/her own password. All taxpayers should jealously protect details about their TIN account since they are re- sponsible for all the transactions conducted through their TIN account. 1.2 General Registration requirements These depend on the registration Category i.e. as an individual or non-individual (E.g. Company). • An active email address and mobile telephone. • For an Individual, TIN registration requires a National ID or any other two of the fol- lowing valid identification documents; Village ID, Employment ID, Passport, Driving permit, Voter's card, recent Bank statement, Work permit, financial card, Visa, NSSF card etc. • For a non-individual, TIN registration requires Certificate of Incorporation/certificate of registration, Company Form 20 showing the Directors of the company, the TINs of the directors or any other persons with legal capacity to bind the entity, and any oth- er legal documents that confirms existence. 1.3 Business type identification criteria A business type is identified basing on the mode of operation and the activities involved. In case it involves more than one business activity (a mixed business); it is categorized depending on the core activities that generate more revenue i.e. the principal business that contributes the largest portion of the total Business Income. 1.4 Taxes imposed on registration 1.4.1 Income Tax Income Tax (IT) is tax imposed on a person's chargeable income at specific rates and is charged for each year of income. Taxable income is derived from three main sources of income as explained in part (A) of this book Income Tax may be categorized into: • Individual Income Tax that is imposed on all individuals engaging in income gener- ating activities/businesses. • Corporation Tax that is imposed on all corporate entities (companies) engaging in income generating activities/businesses. • Pay as You Earn (PAYE) that is charged on employees (earning monthly income above 235,000) by employers and then remitted to URA on behalf of the employees. • Withholding Tax (WHT) that is withheld at source. This tax is an advance tax and as such the taxpayer needs to clearly declare it in the applicable tax return such that it reduces the tax liability of the period it relates to. • Rental Tax that is imposed on the total amount of rental income derived by a person for the year of income from the lease of immovable property (land and/or buildings) in Uganda. Note that ground rent and property fees charged by local authorities do not affect rental tax for individuals; however, where applicable they are allowed as expenses for non-individuals when computing their rental tax. 1.4.2 Value Added Tax (VAT) This is a tax imposed on the supply of taxable goods and services made by a taxable person and imports of taxable goods or services other than exempt goods or services as listed in section 19 and 20 of the VAT Act Cap 344. All persons dealing in taxable supplies with a gross turn over above 150 million are required to register for VAT. General Requirements for VAT Registration include; • The applicant must be already in business of supplying taxable goods or services • The applicant must have a fixed place of abode or business. • The applicant should be able to keep proper books of accounts. • The applicant should be able to submit regular and reliable tax returns • The applicant should be a fit and a proper person in the opinion of the Commissioner General. 1.4.3 Local Excise Duty (LED) This is a tax charged on specific goods and services (excisable goods and services) manufactured locally or imported using the rates listed in schedule 2 of the Excise duty Act 336. All persons dealing in excisable goods and services must register with the Commissioner for the purpose of local excise management and regulation. Upon registration the com- missioner issues the applicant a certificate of registration. Note: • A manufacturer of excisable goods becomes liable to pay excise duty when the goods are removed from his premises. • A person providing an excisable service becomes liable to pay excise duty on the earlier of: a) The date on which the performance of the service is completed; b) the date on which payment for the service is made or c) the date on which an invoice is issued 1.4.3.1 Digital Tax Stamps A person dealing in goods, whether locally manufactured or imported is required to affix a tax stamp on goods locally manufactured or imported. The Minister prescribes, by stat- utory instrument, the locally manufactured or imported goods on which tax stamps shall be affixed. This means that such products are not allowed on the Ugandan market unless they have digital tax stamps. The following excisable products are gazetted for initial implementation of the Digital Tax Stamps namely; wines, spirits, mineral water or bottled water, tobacco products, beer, soda, sugar, cement, cement bulker, cooking oil, fruit juice and vegetable juice, other alcoholic, other non-alcoholic and any other fermented beverages. The commissioner of URA recommends the manner in which a tax stamp is to be affixed to goods. Note that the commissioner can register a person for an additional tax type when sat- isfied that he/she fulfills the registration requirements therein. 1.4.4 Gaming Tax This a tax imposed on an operator of a casino, gaming or betting activity issued with a license under the Lotteries and Gaming Act. 1.4.5 Digital Service Tax This a tax imposed on every non-resident person deriving income from providing digital services in Uganda to a customer in Uganda at a rate of 5% on gross earnings 1.5 Benefits of acquiring a TIN i. Obtaining a TIN enables you to: • Import or export goods within and outside Uganda • Claim tax benefits that accrue to you e.g. tax refunds etc. • Access bank loans • Acquire a trading license from Local Government / KCCA to undertake business in their jurisdiction. • Register your Motor Vehicle • Process stamp duty on land transactions above 50 Million Shillings. etc ii. A TIN acts as a security measure on transactions regarding some assets e.g. motor vehicles, land or any other property since a notification is sent to the owner using their TIN whenever a transaction occurs in regard to the same asset Note: • In case a taxpayer is not in position to effectively handle his tax matters, he can ap- point a tax agent to transact with URA on his/her behalf. • In case a taxpayer temporary closes business with the intention of resuming, he can deactivate his TIN and later on reactivate it when the business resumes. • In case the commissioner is convinced that a taxpayer no longer satisfies the regis- tration conditions, he can deregister that person. 1.6 Tax Agents A tax agent is a person licensed by the Tax Agents Registration Committee (TARC) to handle tax related issues on behalf of the tax payer. An agent can be an individual, partnership, or company. Tax related issues may include; • Preparation, certification and filing of tax returns, information returns or other state- ments and reports required by the authority. • Preparation of requests for ruling, petitions, objections, requests for refund and corre- spondences with the Authority. • Attending meetings and hearings on behalf of the taxpayer. A Tax Agents Registration Committee (TARC) is a committee that handles registration, renewal and cancellation of the registrations of tax agents and it comprises of 5 members and these are; • The commissioner General of Uganda Revenue Authority. • A representative from the accountancy profession nominated by the institute of Cer- tified Public Accountants (ICPAU) • A representative from the legal profession appointed by the Uganda Law Society • 2 members from the private sector 1.7 Accounts and record keeping • All taxpayers are required to keep proper records of all business transactions in En- glish language such that they can easily determine their tax liability. It is recommend- ed that records should be kept for at least 5 years from the end of the tax period to which they relate or other period as specified in the tax law. • Where a record is not kept in English, the taxpayer will be required to meet the cost of translation into English by a translator approved by the Commissioner. However, the tax returns and other correspondences with the Commissioner must be in English. 1.8 Changes in registration details All registered tax payers are required to update their registration details using their accounts on the URA website (or through submission of signed manual amendment forms to any nearest URA office if they fail to access their account online) as soon as an amendment is made in the registration details. This will enable timely and accurate dissemination of correct information to the parties concerned regarding the taxes whenever need arises. Some of the registration amendment indicators include; • Errors in registration details. • Changes in ownership/directorship of the business. • Changes in location or nature of business. • Changes in business contact or contact person details. • Changes in registered tax types. etc. 1.9 Penalties and Offences under registration • A person who fails to apply for registration as required under a tax law is liable to a default penalty equal to the higher of- a. Double the amount of tax payable during the period commencing on the last day of the application period until the person files an application for registra- tion with the Commissioner or the Commissioner registers the person on the commissioner's own motion;or b. Shs. 1,000,000 • A person who fails to apply for registration or notify the commissioner of a change in registration particulars or circumstances or fails to cancel a registration as required under a tax law commits an offence and is liable on conviction to- a. a fine not exceeding Shs. 3,000,000 or imprisonment not exceeding six years or both on conviction if the failure/act was done knowingly or recklessly. b. a fine not exceeding Shs. 1,000,000 or imprisonment not exceeding two years or both on conviction in any other case. • A person who knowingly or recklessly uses a false TIN on a tax return or other doc- ument prescribed or used for the purposes of a tax law, commits an offence and is liable on conviction to a fine not exceeding Shs. 3,000,000 or imprisonment for a term not exceeding six years or both. Note that Taxpayers will always receive feedback on their applications through accurate email addresses and telephone numbers indicated in the applications. 2.0 RETURN FILING • A tax return is a declaration in a form prescribed by the Commissioner, on which a taxpayer reports his or her income for the tax period as a way of self-assessment for taxation purposes. • A tax period is the duration for which a return is required i.e. a year, month or week. • A due date is the deadline for filing a return beyond which a person is required to pay a penalty. 2.1 Furnishing of returns A taxpayer registered with URA for any tax type other than Pay as you earn (PAYE) has an obligation to submit a return for the tax period as per the respective tax law. URA has facilitated the taxpayers to fulfill this obligation by introducing electronic filing of tax re- turns. Return type Due date and filing remarks Income tax • Every tax payer is required to furnish a return of provisional tax estimate (i) On or before the last day of the third, sixth, ninth and twelfth months of the year of income in respect of an individual taxpayer's liability; for a period of three, six, nine or twelve months; and (ii) On or before the last day of the sixth and twelfth months of the year of income in respect of a taxpayer's liability other than an individual; for a period of six or twelve months. • All tax payers are required to submit final Income tax returns (including rental income returns where applicable) for each year of income not later than the sixth month after the end of the year of income. Those with an annual turnover above 500 million shillings must file their income tax returns with audited financial statements prepared by an accountant registered by the Institute of Certified Public Accountant of Uganda. VAT • All VAT registered taxpayers are required to submit Value Added Tax returns (VAT) for each month by the 15th day of the following month. PAYE • All PAYE registered taxpayers are required to submit Pay As You Earn (PAYE) tax returns for each month by the 15th day of the following month. Excise duty • All taxpayers registered for Excise duty are required to file Excise duty returns for each month by the 15th day of the following month. Gaming Tax • All tax payers registered under Gaming and Pool Betting are required to submit their weekly returns by Wednesday of the following week. Others • In case of any return required to be submitted under the tax law, it must be done with- in the specified period under the tax law. Note that all tax returns must be submitted in the prescribed format and the commissioner can appoint any other person to assist a taxpayer who fails to file at his/her cost. Note: The law provides for a separate quarterly return for non-resident suppliers of services deemed to be supplied in Uganda when made to non-taxable persons. A supply of services by a person who carries on business outside Uganda to a non-taxable person in Uganda and is engaged in providing services in connection to the following shall be deemed to take place in Uganda: • Immovable property in Uganda; • Radio or television broadcasting services received at an address in Uganda; • Electronic Services delivered to a person in Uganda; • Transfer, assignment, or grant of a right to use a copyright, patent, trademark, or similar right in Uganda; • Telecommunication services initiated by a supplier of telecommunication services or services to a person who is roaming while temporarily in Uganda. The foreign supplier shall be required to file returns within 15 days after the end of the three consecutive calendar months. 2.2 Certification of tax returns All tax agents are required to provide the taxpayers with a signed certificate stating the documents used in preparation of their returns and must certify that all documents have been examined and thus reflect the correct data and transactions for the return period. Note that; • Tax agents who do not provide the certificate will be required to write to the taxpayer clearly explaining the reasons. • Tax agents who prepare or assist in the preparation of tax returns are required to make a declaration in the taxpayer's return stating whether a certificate or a state- ment has been provided to the taxpayer and he may be requested to provide a copy. • Tax agents are required to keep copies of certificates and statements provided to taxpayers for a period of five years from the date of filing the related tax return. 2.3 Advance returns The commissioner may by notice in writing at any time during the tax period require a tax payer to file a return for the stated tax period by the date specified in the notice (the date may be before the end of the tax period) if there is proof that; • A taxpayer has died, • A taxpayer has become bankrupt or gone into liquidation, • A taxpayer is about to leave Uganda permanently or any other reason the Commis- sioner considers appropriate. Note that the taxpayer is also required to pay any tax due under the return by the stated date in the notice. 2.4 Extension of Return Filing date If a taxpayer is not able to file a return by the required date, he can apply for an extension to file his return providing reasons justifying the extension. Note that; • The extension if granted will not exceed 90 days and does not change the due date for payment of the tax due. Interest will therefore accrue on any outstanding tax lia- bility. • Multiple extension applications are allowed provided the number of days does not exceed 90 days in aggregate. • If the taxpayer is dissatisfied with the Commissioner's decision about the extension, he may challenge it under the objection and appeals procedure. 2.5 Offences and penalties relating to tax returns • A person who fails to furnish a tax return by the due date, or within a further time allowed by the Commissioner is liable to a penal tax equal to 2% of the tax payable under the return before subtracting any credit allowed to the taxpayer on his or her tax return or Shs. 200,000 per month, whichever is higher, for the period the return is outstanding. • Failure to furnish a tax return by the due date or within a further time allowed by the Commissioner commits an offence and is liable on conviction to a fine not exceeding Shs. 1,000,000 and upon failure to furnish the return within the period prescribed by court is a fine not exceeding Shs. 2,000,000 on conviction. • If a taxpayer's provisional chargeable income for a year of income is less than 90% of the actual chargeable income assessed for that year, the penalty is 20% of the dif- ference in tax on the taxpayer's estimate and 90% of the actual chargeable income. • A person who knowingly or recklessly makes false or misleading statements or omits from a statement made to a tax officer, any matter or thing without which the state- ment is misleading in a material particular, and the tax payable by the person ex- ceeds the tax that was assessed as payable based on the false or misleading state- ment or omission, is liable to a penal tax equal to double the amount of the excess. • A person who knowingly or recklessly makes false or misleading statements or omits from a statement made to a tax officer, any matter or thing without which the state- ment is misleading in a material particular, commits an offence and is liable on con- viction to a fine not exceeding Shs. 110,000,000 or imprisonment for a term not ex- ceeding ten years or both on conviction. 2.6 Return filing procedure Returns can be filed online by visiting the URA web portal (https:// www.ura.go.ug), click on download online forms to access the respective return forms, Fill the form to generate an upload file, log into your account to upload and submit. If the upload is successful, the taxpayer will receive an auto generated e-acknowledgement receipt which is evidence of submission. In case of any challenges in filling the respective returns, send an email about the challenge to the official email address [email protected] or call the toll free line 0800117000/0800217000. NB: Both Payment and Return should be made by the filing due date. 2.7 Amendment of tax returns A taxpayer may amend a tax return upon discovery of an error on condition that the return is not under investigation and amendment is done within 3 years from the date on which the original return was lodged by the taxpayer. 3.0 ASSESSMENTS An assessment is a tax form showing the estimated taxable income generated and the tax payable on it including any penalty. 3.1 Self-Assessment This is a tax form prepared by the tax payer showing the taxable income generated and the tax payable on it. Note; • If a tax payer has submitted a self-assessment for a tax period, he is treated as hav- ing declared the amount of tax payable for the period. This is done through return filing. • If a tax payer declares a loss for a return period, he is treated as having made an assessment of the amount of the loss for that year, being that amount in his return. 3.2 Default Assessment This is a tax form showing the estimated taxable income generated and the tax payable on it issued by the Commissioner due to failure to furnish a self-assessment return by the required date. The taxpayer will receive a notice in writing showing the amount of tax assessed, and any penal tax and interest payable in respect of the amount assessed, assessed period, the due date for payment and the objection criteria. 3.3 Additional Assessment This is an amendment of an original tax assessment issued by the commissioner for any tax period to ensure that the correct tax liability is obtained. It is issued at any time, if fraud, gross or any willful neglect has been committed by, or on behalf of the taxpayer or new information has been discovered in relation to the tax payable for a tax period. Note: • All self-assessment returns filed before 1st July 2016 can be amended within a three year period form the filing date while those filed after 1st July 2016 can only be amend- ed within a twelve months period from the filing date provided the return is not under investigation. • An additional assessment notice will show the amount of tax assessed, and any penal tax and interest payable in respect of the amount assessed, the assessed period, the due date for payment and the objection criteria. Note that the service of a notice of an additional assessment does not change the due date for payment of the tax payable under the assessment and thus the penal tax and interest is payable based on the original due date. 4.0 OBJECTIONS AND APPEALS 4.1 Objections The Objections and Appeals procedure is a procedure for challenging an assessment or any other matter based on discretion by the Commissioner and is provided for under; The Tax Procedures Code Act - Sections 26 & 27 • A person who is dissatisfied with a tax decision for example an assessment, may within 45 days after receiving notice of the tax decision, lodge an objection with the Commissioner. • The objection should be in a prescribed form and state precisely the grounds upon which it is made. There should be sufficient evidence to support the objection. • Where a taxpayer has lodged an objection to a tax assessment for a tax period, the Commissioner may consider the objection if the taxpayer;