ARE EXPORTS SUBJECT TO VALUE ADDED TAX?

Yes, all exports of goods and services are liable to VAT but at the zero rate.

WHAT DOES THIS MEAN IN PRACTICE?

It means that you have to charge VAT at 0% no VAT is payable. However, more importantly you are entitled to reclaim the VAT on all the goods and services purchased to produce the exports.

WHY SHOULD I REGISTER FOR VAT IF I ONLY EXPORT?

All exports are taxable supplies even at a Zero rate and the law requires you to register if your turnover exceeds the registration limits - See VAT 3- Zero Rated Goods & Services.

Furthermore, you will be entitled to refunds of VAT from the Uganda Revenue Authority if you export goods or services, and it will therefore be in your interest to register regardless of your level of turnover, to be able to claim VAT refunds.

WHAT DO I HAVE TO DO, TO CLAIM VAT REFUNDS ON EXPORTS OF GOODS?

If you are exporting goods from Uganda you must ensure that the proper Customs export entry is completed and presented to the Customs department before you dispatch your goods. They will wish to examine the goods to confirm that your declaration is accurate. You must always ensure that you obtain from the Customs department a Customs certified copy of the export entry. This certificate from the customs department will confirm that your goods have left Uganda. WITHOUT THIS DOCUMENT YOUR CLAIM FOR ZERO-RATING WILL BE DISALLOWED AND YOUR REFUND WILL DISALLOWED.

You will also be required to produce additional evidence in the form of an order for the goods from a foreign customer or a copy of the commercial transit document (i.e. Airway bill, bill of lading or Uganda Railways transit note).

WHAT ABOUT THE EXPORT OF SERVICES?

This is rather different as you have nothing to show to the Customs department at exportation.

To qualify for zero-rating an exporter of services has to be able to demonstrate that the service he has provided was used or consumed outside Uganda. For example a Uganda architect may produce plans in Uganda for a building to be built by a customer outside Uganda. This would involve an export of services.
You must therefore be able to prove that the service was used in a foreign country. The evidence, which will be considered to substantiate this claim will be a contract which clearly specifies the place of use of consumption of the service outside Uganda or evidence that the service was provided at or for a building or premises located outside Uganda. The evidence must be clear, otherwise you will have to charge standard VAT.

<< Back to VAT Regulations