TAT Orders DHL to Pay Over UGX 1.4 Billion to URA

DHL Supply Chain International Ltd, a Ugandan subsidiary of the the Deutsche Post (DHL group in Germany) has been ordered to pay UGX 1,484,422,000 of Value Added Tax (VAT) to URA in a ruling by the Tax Appeals Tribunal (TAT).

The ruling follows DHL’s appeal to TAT challenging URA’s position to collect VAT on imported services including management, Information Technology and internet connectivity services said to have been consumed between January 2014 and December 2016.

In DHL’s argument, the said services are procured and provided by the DHL Supply Chain Management GmbH, a subsidiary of the parent company the Deutsche Post (DHL group) in Germany, for the subsidiary stations across the world, however, the cost is met by individual regional offices according to consumption rate.

They added that during the period assessed, the Ugandan subsidiary company was unable to pay for the services due to financial constraints and as such, the parent company “forgave” DHL Uganda of its liabilities. The Ugandan company thus reversed these expenses and issued credit notes for the said reversal in 2017.

URA, represented by Counsel Mwajumah Nakku Mubiru and Diana Mulira Kagonyera from the Legal Department argued that the VAT assessment was based on the fact that the said services were duly provided to and consumed by DHL. It was also evident that DHL had deducted and paid the Withholding Tax (WHT) for the services which it received from its parent company but did not declare any VAT on the said amounts. FULL ARTICLE.....