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Uganda: Government imposes VAT on non-resident electronic service providers

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The Ugandan Revenue Authority announced the collection of VAT from nonresident suppliers of digital services on July 8.  

 

Uganda has joined the majority of countries and introduced VAT to foreign digital platforms. It is now a requirement for all non-resident electronic services provider companies who operate in Uganda to collect, file, and pay VAT effective 1st July 2022.  

 

Electronic services that are taxable are the following:

 

  • Online advertising,
  • Music and movie streaming,
  • Websites, web hosting, or remote program and equipment maintenance,
  • The provision of software and software updates,
  • The provision of images, text, and information,
  • Access to databases,
  • Self-educational materials,
  • Other broad casts and events, including television.

 

Some of the non-resident service providers, including Google, Microsoft, Netflix, Meta, Spotify, Zoom, Amazon, Apple, Bolt, and Uber, have registered and paid the required taxes after initial contact from URA. Tax authorities anticipate that this step will generate at least UGX 5 billion in tax revenue.

 

The announcement also covers the process and location for VAT Filing by non-residents.

 

According to the OECD, 70 countries currently impose VAT on digital services, and another 40 intend to do so within the next year. The OECD estimates that VAT accounts for 29% of the tax revenue collected by African governments. 

 

 

Source: ura.go.ug  

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