Allied Beverage Company Ltd v Uganda Revenue Authority
High Court, Civil Appeal No. 0039 of 2022. September 2024.
Billed abroad: the first round
For 2016 to 2020, a marketing agent's services to a US affiliate were assessed VAT of UGX 17.4 billion. The High Court overturned the Tribunal.
The situation
Under a 2016 service agreement, a Ugandan company provided brand marketing and market research to a US affiliate of a soft-drinks brand, carried out in Uganda. The Revenue Authority assessed VAT of UGX 17,400,459,133 for 2016 to 2020 on the basis that the services were consumed locally; the Tribunal agreed.
How it was resolved
The High Court allowed the appeal. As reported, it treated the OECD VAT guidelines as non-binding soft law that may still guide the interpretation of Uganda's VAT law where they do not conflict with it, and accepted the business-to-business, destination-based argument that the taxing right lay with the recipient's country.
What a practitioner takes from it
Read with Case 003: for a later period the Tribunal upheld VAT on similar services, finding an addendum on place of consumption a misrepresentation. Facts, contracts and evidence differ between periods; neither ruling settles the other.
What could change
Statutory rules on the place of supply of business-to-business services would replace two opposite rulings with one test.