|Exemptions for NGOs/CBOs|
It is not automatic that all NGOs are exempt. This status is determined by the nature of the organization’s activities.
Organizations that wish to be exempted, make an application using form DT 1017.
An exempt organization is described as any company, trust, institution;
1. Which is;
- An amateur sporting association.
- A religious, charitable or education institution of public character.
- A trade union, employees association, registered under the laws of Uganda or association established for purposes of promoting farming, mining, tourism, manufacturing, or Commerce and Industry in Uganda.
2. Which has been issued with a written ruling by the commissioner currently in force stating that it is an exempt organization.
3. None of the income or assets of which confers or may confer a private benefit on any person.
Requirements for Exemption
Information to be provided By a person applying to be considered as an Exempt Organization
- Certificate of incorporation and/or Registration certificate from the relevant governing body.
- Names of subscribers/trustees/members/governors/directors.
- Memorandum and Articles of association/ constitution/ trust deed/ rules and regulations.
- Categories and number of assets owned by the applicant.
- Categories and number of assets held or owned by the subscribers /trustees / members/ governors / directors and by their spouses and children or other members of the family. In case of immovable property, indicate location and value.
- Registration with URA by indicating TIN.
- Income Tax returns for the previous 3 financial years for the applicant.
- Income Tax returns for the subscribers or trustees or members or governors or directors for the last 3 years.
- PAYE receipts for the last 6 months preceding the date of application.
- Copy of tenancy agreement.
- Audited financial accounts for the last 3 years.
- Bank statements for the last 3 years for all bank accounts operated by the applicant.
- Letter of confirmation from the local authority confirming existence and activities of the applicant.
- Any other relevant documents or brochures that may be relevant in confirming the existence of operations, for example minutes of last Annual General Meeting (AGM).
- A declaration certifying that all information as required has been provided without any omission and it’s correct.
Key terms in VAT Registration
VAT registration is the process of getting eligible persons put or recorded on the VAT Register.
This refers to the minimum level of taxable turnover above which a person is required to register for VAT. The current annual threshold is Shs 150 million. However for registration purposes, this is determined on a quarterly basis. i.e. it is Shs 37.5 million in any three consecutive calendar months.
This is the total value of taxable sales of both goods and services.
Persons Required / Eligible to Register for VAT
Persons required to register for VAT (Compulsory Registration) There are two categories of persons that are required to register for VAT under the VAT Act. These are:
- Persons who make taxable supplies s (turnover) in excess of 37.5 million in any 3 consecutive calendar months.
- Public bodies that engage in business activities. These include Government, Ministries, departments, parastatals, town councils and District councils and District.
General Requirements for VAT Registration
(i) The applicant must have a fixed place of abode or business.
(ii) The applicant should be able to keep proper books of accounts.
(iii) The applicant should be able to submit regular tax returns.
(iv) The applicant should be a fit and a proper person. In the opinion of the Commissioner General.
VAT Registration Processes
(a) Application under compulsory basis
A Person who makes taxable supplies that exceed the VAT threshold is required to register for VAT. The person shall apply to register within 20 days after a period o f three consecutive calendar months if in that period the person’s taxable supplies exceeded a quarter of the annual threshold (currently Shs 37.5 million). For example, if one’s taxable sales in the months of January to March 2016 exceed Shs 37.5 million, that person must apply for registration in the first 20 days of April 2016.
Where a person expects to make taxable supplies of more than a quarter of the annual threshold (Shs 37.5 million) in the next three months, that person is required to apply for registration at the beginning of that period of the projected three consecutive calendar months. This is especially common with contractual jobs where one would be certain of what to earn and when. For example if at the beginning of January one projects that he/she will make taxable sales over shs,37,500,000 in the next three months is (from January to March 2016), then that person is required to apply for registration on 1st January 2016. Furthermore, in case the Commissioner General finds reasonable grounds to believe that the person is required to apply to registration but has failed to register, he/she shall register such person and registration shall take effect as he/she deems.
(b) Compulsory registration for Public Bodies Public Bodies should apply for registration on the date they start engaging in any business activity.
(c) Application under Voluntary Registration The date of application is as per the taxpayer’s choice.
Inspection / Notification
This exercise is conducted to confirm the correctness of the information provided in the application form provided in the application form by the taxpayer. It is on the basis of the findings that the decision whether or not to register that person is made and the taxpayer notified accordingly.
Effective date of registration
In the case of compulsory registration, the effective date of registration is the first day of the month following the month in which the application was required to be made. For instance, if due date to apply for registration fell in the month of April 2016, effective date of registration would be 1st May 2016.
For the case of voluntary registration, the effective date of registration is the first day of the month following the month in which the application was made. For instance, if the application was in the month of January, 2016, effective date of registration would be 1st Feb. 2016.
VAT Registration Entitlements
Upon being registered the person will be entitled to Input tax credit on both capital goods and trading stock at hand on the effective date of registration provided they were purchased not more than six months prior to effective date of registration.
Penalty for late registration
A person who fails to apply for registration by the due date is liable to a penalty of double the tax due from the date the person ought to have been registered to when he is registered.
VAT Inspection Procedure
1. On the agreed date and time, two officers from URA with valid identification will visit your business premises to confirm the following:
- Nature of business as indicated in the TIN application.
- Place of abode (physical location of the business) as evidenced by either rent receipts or tenancy agreement.
- Business records e.g. receipts, pay roll, invoices etc.
- Number of employees.
2. Following the inspection by the officers, the TIN application will either be approved with VAT granted if you meet the requirement above or approved without VAT if there was any requirement that was not fulfilled.
3. In the event that you did not meet the inspection requirements and VAT is not granted, you can reapply for VAT after fulfilling the requirements.
- Failure to respond to the first proposed inspection/interview date, two reminder notifications will be sent on the 7th and 14th day upon which you will be expected to respond.
- Failure to respond to the above notifications will lead to auto rejection of the VAT application.
This is the process of removing or cancelling a registered person from the VAT register.
Conditions for deregistration
(i) When one ceases to make taxable supplies.
This may occur when one changes the nature of business from taxable to exempt supplies or through legal re-categorisation of supplies, from taxable to exempt e.g. road construction works changed from being taxable to exempt effective 1st July 2004. It can also be through winding up of business.
(ii) Decline in turnover.
This is a two-way test involving:
• Taxable turnover excluding VAT in the last 3 months no longer exceeds 25% of the threshold (currently Shs 37.5 million); and
• Taxable turnover excluding VAT in the last 12 months no longer exceeds 75% of the threshold (currently Shs 112.5 million).
(iii) In the case of a taxpayer registered voluntarily, deregistration can only be effected after 2 years from the date of registration.
Process of Deregistration
(a) Application for deregistration arises in two ways:
(i) Upon application on in writing by the taxpayer.
(ii) On the Commissioner General initiative if (s)he is satisfied that the taxpayer was not required to apply for registration. This happens even if the taxpayer does not apply for it.
(b) The Commissioner General may initiate deregistration under the following circumstances:
(i) When the taxpayer has no fixed p lace of abode or business premises.
(ii) The taxpayer has no payer has no proper accounting/ business records for the business carried on.
(iii) The taxpayer does not submit regular and reliable tax returns.
(iv) The taxpayer is not fit and proper in the opinion of the Commissioner General.
Effective date of deregistration Cancellation of registration takes effect at the end of the period (month) in which the de-registration e.g. if the decision to deregister is on March 2016, deregistration will be effective on 20th March 2016.
Obligations at date of Deregistration
Where input tax has been claimed on goods in stock, including capital goods, the deregistered person is liable to VAT on the market value of such goods still in stock.
Gaming and Pool Betting
Gaming and Pools should only be carried on by persons holding licenses.Licenses are issued by the Minister responsible for Finance or persons authorized by the Minister responsible for finance, who are defined as The Treasury. Statutory Instrument 292-1 (The Gaming and Pool Betting) (Control and Taxation) Regulations are specific that the application for a license is made to the Secretary to Treasury who also has powers over; Audit, Returns and Payment of Tax. However, in practice the taxes are paid to Uganda Revenue Authority.
Statutory Instrument 292-2 provides for license fees to be payable annually as follows;
|Casino- promoter, principal agent or agent||3,000,000|
|Gaming and pool betting operator- promoter, principal agent or agent||1,000,000|
|license for a gaming and pool betting branch||100,000|
The Promoter or Agent is exempt from the above licenses if he holds an investment license from the Uganda Investment Authority (Statutory Instrument 292-3).
The licenses are issued to:
i. Promoters- Promoting GPB in Uganda
ii. Principal Agents- Agent in Uganda of a promoter of GPB outside Uganda.
iii. Agent- Agent of either the promoter of GPB in Uganda or Agent of a principal Agent of a foreign promoter.
The license therefore is a pre-registration activity.
Local Excise Duty
Registration for Local Excise Duty is only applicable to taxpayers who deal in or manufacturing excisable goods and those dealing in excisable services.
The taxpayers include manufacturers of; beer, wines, spirits, sodas, juices, mineral water, cigarettes, fuel, cement, sugar and service providers of airtime on cellular, landline and payphones.
The law on Local Excise duty is that the taxpayer first obtains a license before dealing in Excisable goods or services. Local Excise duty registration is therefore compulsory as long as one falls within the EAEMA and the ETA provisions.
User Guides for submitting of your Registration Annexures
Step by Step guide for VAT Registration
Step by Step guide for LED Registration
Step by Step guide for GPBT Registration