URA guidelines regarding filing tax returns & making payments in Uganda

URA guidelines regarding filing tax returns & making payments in Uganda.

After companies are formed, they have the obligation to file returns with different bodies that regulate them for purposes of accountability and monitoring. In Uganda, companies are reqired to file returns with the Uganda Registration Services Bureau(URSB),Non Govermental Organisation Bureau for Not-for-profit entities, Finacial Intelligence Authority and also with the Uganda Revenue Authority(URA)

Companies register with the Uganda Revenue Authority for Income Tax Value Added Tax and Local excise Duty. Income Tax includes but not limited to corporaton Tax, Pay as you earn, and Withholding Tax . they are different requirements/criteria to register for these different tax type. A tax payer may be registered for all or some of the taxes herein metioned.

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What you should know about filing returns.

1. Tax period

The tax period for income tax purposes is important in classifying what transactions should be considered for taxation and itshould be matched with the taxpayers accounting/reporting year of income.

According to the income Tax Act , a year of income is a period of twelve months ending 30th June. This is the noraml year of income however, a tax payer can apply and have a year of income that ends on a date other than 30th June and this is refered to a subsituted year of income but this should too should be a period of twelve months.A transtional Year of income is a period less than 12 months falling between the normal year of Income.

2. The different types of Tax Returns

A return is a periodic declaration of taxable income of taxable income in a specified format that is prescribed by the commissioner URA. Returns are Filed monthly,bi-annually or anually and the following are the different returns filed with the URA:

(i). Return of Income Tax Returns for companies(Non-Individual Returns), Rental Income& Individuals.

Final income returns are filed within six months after the end of financial year and the provisional returns are filed with the first six months of the Financial Year ( tax year), For example taxpayers whose year of income 30th June 2021 are supposed to file their return by 31 December 2021ends Tax payers whose tax accounting date is September 2021 have to file their taxes by the 31 march of the next year being 2022

(ii). Monthly Tax Returns.

Taxpayers who are registered for Value Added Tax (VAT), Pay As You Earn (PAYE) Local Excise Duty, Withholding Tax, Taxes under the Lotteries and Gaming Act are supposed to file their returns not later than fifteen days after the end of the tax period to which the return relates for example Returns relating to the period June, 2021 are due by the 15th of July 2021and are unable to file are granted extension to file.

3. Tax collection & payment

The due date for paying corporation tax is the sixth month after the end of the financial year. The filing and payment dates are the same for corporation tax.

Provisional Tax by a non-individual is paid by the sixth and the twelfth month of the year of income in two installments. For example for the year of income 1 July 2021-30 June 2022.The first installment of the provisional Tax should be paid by 31 December 2021 and the second installment on the 30 June 2022.

Value Added Tax (VAT), Pay As You Earn (PAYE) Local Excise Duty, Withholding Tax, Taxes under the Lotteries and Gaming Act are supposed to be paid not later than fifteen days after the end of the tax period to which the return relates for example Returns relating to the period June, 2021 are due by the 15th of July 2021and are unable to file are granted extension to file.

4. Failure to comply.

Failure to comply wit URA;s guide lines will lead to the following measures by URA;

  1. Estimated Administrative Assessments.
  2. Compliance Tax Audits or Tax Investigations
  3. Penalties & Offences for non-compliance – Non-Registration, Non-Filing, Improper Records, False or Misleading statements, Understating provisional tax, Failure to provide information
  4. Interest on late payments
  5. Enforced collection

Documentations you need when filing returns

Return of Income- Statement of Profit or Loss and a balance sheet. Audited Accounts by an a certified accountant are required for taxpayers with an annual turnover of shs.500 million and above.

PAYE Return-Payroll, Pay slips Employee Tins are required to file a PAYE return.

Withholding Return-The particulars and Tax Identification Numbers (TINS) of persons from whom tax is withheld.

Value Added Tax- Tax Invoices issued to customers and received from suppliers, Credit notes and debit notes issued, account details of the tax payer in case of an application for a refund.

When declaring rent expense a taxpayer is also supposed to share the details of their Land Lord to whom the rent is paid. These include the Tax Identification Number of the landlord, Name and Address.

Key aspects to note

A taxpayer is required to file a return whether they were operating or not. In the event that they were not operating, the taxpayer should file a return, for example if an employer has not paid salaries for the month of July, then he is required to file a return displaying zero against the names of the employee he or she did not pay.

If a taxpayer is not able to file for a return on time. They can make a formal application to Uganda Revenue Authority requesting to file the return at their earliest convenience

A Taxpayer who makes a voluntary disclosure to URA and pays the outstanding principal tax therein shall have their penalties and interest remitted in accordance with the Law.

A Taxpayer who makes a voluntary disclosure to URA and pays the outstanding principal tax therein shall have their penalties and interest remitted in accordance with the Law.

The use of URA online portal is still functional for services like registration and filing of taxes.

We advise clients to file returns on time if they can to avoid the since URA e-services are still functional.

We advise clients to file returns on time if they can to avoid the since URA e-services are still functional.

There is a window for those who have not been compliant to have a tax health check and voluntarily disclose their outstanding liabilities during these periods. All penalties and interest that would have accrued on the principal taxes will be waivered. This has an effect of reducing the taxpayer’s burden on the total liability due to the authority.

Contact Persons

Stephen Tumwesigye

Managing Partner

Lynne Wells

Special Counsel

Juliet Namirembe

Senior Tax Associate

Mbabazi Doreen Darlson

Tax and Accounts Associate

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