evidence sufficient to satisfy the Commissioner-General that the goods have been exported, in the form of an order form, or signed contract with, a foreign purchaser, or transport documentation that identifies the goods such as:
a transit order or consignment note issued by the railway company for goods exported by rail;
a copy of a bill of lading for goods exported by water;
a copy of an airway bill for goods exported by air; or
a copy of a transport document for goods exported by road.
Records must be kept for at least six years after the end of the tax period to which the records relate. Records cannot be kept outside the country. Records can also be maintained in electronic form.
Records should be maintained in the English language and may be accessed by the Commissioner
General or authorised officer at any
time during normal working hours.
Specific VAT rules
Bad debt relief may be allowed by the Commissioner-General where:
a registered person has supplied goods or services and has accounted for and paid VAT on that supply but has not received any payment from the person liable to pay the tax;
two years from the date of that supply have elapsed or that person has become legally insolvent; and
the Commissioner-General is satisfied that the person has taken all reasonable steps to recover the
money and they have been futile.
Land and buildings
The supply of unimproved land is exempt from VAT.
The letting of immovable property is exempt. However, the letting of commercial premises, hotel or holiday accommodation property for periods not exceeding three months, serviced apartments, or property for parking or storing vehicles is standard rated.
In the case of building or construction services, VAT is payable when an invoice is issued or when payment is received or becomes due, whichever is the earlier, in respect of each stage of the work completed. Where an invoice or a claim for payment by a contractor requires certification (e.g. by an architect), the time of supply is the time of certification. Where a contractor varies the cost of a contract during the course of execution, the variations to the original contract are deemed to include VAT.
In the case of a rental agreement (i.e. an agreement for the letting of goods, including a hire-purchase agreement or a finance lease), goods are treated as successively supplied for successive parts of the period of the agreement and each successive supply occurs on the earlier of the date on which payment is due or received. VAT is payable on the amount of rental payments due or received.
The supply of goods under a finance lease is treated as a supply under a rental agreement. The lessor may claim the input credit at inception of the finance lease and must charge VAT on the lease rentals (including the finance charge). The lessee, if registered for VAT, may claim an input tax credit. A ‘finance lease’ is a lease of goods where:
the lease term exceeds 75% of the
expected life of the goods; or
the lessee has an option to purchase the goods for a fixed or determinable price at the expiration of the lease; or
the estimated residual value of the goods to the lessor at the expiration of the lease term is less than 20% of its fair market value at the commencement of the lease.
The making of a gift is regarded as a taxable supply of goods or services. VAT is therefore charged on the market value of such gifts unless the goods are supplied or used as trade samples.
There are no specific rules for secondhand goods. Sales made by a taxable person are subject to VAT. The export of secondhand goods is zero rated in accordance with the general rules.
Small retailer scheme
No special scheme is available for small retailers.
The VAT consequences of supplies made by tour operators can be summarised as follows:
air travel – international travel is zero rated and local travel is exempt;
car rental – standard rated;
accommodation – exempt, if located outside Kampala;
tourism services – standard rated;
packaged tours – standard rated;
marketing and management fees – standard rated.
Transfer of a business
Transfer of a business (or separate part thereof) as a going concern is exempt if the transferor and transferee are both