ZERO RATED GOODS AND SERVICES (SCHEDULE III)

WHAT ARE ZERO-RATED SUPPLIES?

Supplies of zero-rated goods or services are business transactions which VAT is chargeable at 0% (in effect no VAT is charged). The value of these zero-rated supplies forms part of your supplies.

You can claim full INPUT TAX (tax paid on purchases) credit related to your zero rated supplies (see leaflet format 2/96 ‘WHAT CAN I CREDIT AS INPUT TAX’)

If you make only zero-rated supplies you should be able to claim refunds from the Uganda Revenue Authority. It is likely therefore, that it will be in your interests to seek voluntary registration (see leaflet format 2/96 VAT registration guide) if your taxable turnover does not reach the level for compulsory registration.

3.02 ZERO RATED SUPPLIES INCLUDE:

• the supply of exports of goods and services

(a) Goods are tested as exported from Uganda if the goods are delivered to or made available at an address outside Uganda as evidenced by documentary proof acceptable to the Commissioner General.

(b) Services are treated as exported if the services are supplied for use or consumption outside Uganda as evidenced by documentary proof acceptable to the Commissioner General.

• the supply of international transport of goods or passengers and tickets for their transport.

International transport of goods or passengers occurs where the goods or passengers are transported by road, rail, water or air.

(a) from a place outside Uganda to another place outside Uganda where the transport or part of the transport is across the territory of Uganda; or

(b) from a place outside Uganda to a place in Uganda ; or

(c) from a place in Uganda to a place outside Uganda.

• The supply of educational materials and printing services for educational materials.
• The supply of drugs and medicine. This applies to both Human and Animal drugs.
• The supply of seeds, fertilizers, pesticides and hoes.
• The supply of machinery, tools and implements suitable for use only in agriculture.
• The supply of milk, including milk treated in anyway to preserve it.
• Supply of cereals where the cereals are grown, milled or produced in Uganda.

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