Brief Facts:
The Applicant is a publishing house conducting the business of selling magazines and advertising. In 2014, the Applicant applied for a WHT refund of UGX 261,127,178. The Respondent conducted an audit of the Applicant and assessed it with UGX. 395,090,510, which was later revised to UGX. 92,644,423.
Issues for Determination:
- Whether the goods sold are VAT inclusive?
- Whether the Applicant is liable to pay VAT on imported services?
- Whether the Applicant is entitled to deductions arising from marketing expenses?
- What remedies are available?
Tax Appeals Tribunal Decision:
- The Applicant accessed an online media platform to access worldwide information. The Applicant was accessing information provided abroad but delivered locally or remotely. This constituted an import of services for which the Applicant was liable to pay VAT.
- On whether the Applicant was entitled to marketing expenses of UGX 57,087,038 financed by grant, it was held that the Applicant was entitled to a deduction of UGX 57,087,380 for marketing expenses incurred by the Applicant as per Section 22(1) of the Income Tax Act.
- The Tribunal ordered that the adjustments agreed to by the parties and those ordered to be made should be adjusted against the refundable amount. The Tribunal further held that the Applicant is entitled to interest of 2% from the date it made its Application for a refund.
The matter was remitted back to URA for reconsideration.
DOWNLOAD THE FULL RULING HERE…
