Discover the essential guide to mastering the Withholding Tax Exemption Application for 2024/2025 in Uganda. Navigate the complexities of income tax and ensure compliance with our expert insights. Stay informed and secure your financial interests with ease.

Withholding Tax Exemption Application Procedure for 2024-2025

Harvest Uganda

18 Apr 2024

5 min read

Attention all taxpayers! The new financial year 2024/2025 brings about an important opportunity for compliance and savings in the form of the Withholding Tax (WHT) Exemption. Understanding the intricacies of tax law can be daunting, but staying informed is crucial for making the most of such opportunities.

Discover the essential guide to mastering the Withholding Tax Exemption Application for 2024/2025 in Uganda. Navigate the complexities of income tax and ensure compliance with our expert insights. Stay informed and secure your financial interests with ease.

Navigating the Withholding Tax Exemption Application for 2024-2025

The Commissioner has opened the application window for the WHT Exemption, in line with sections 118(2) and 119(5)(f) (ii) of the Income Tax Act Cap 340, as well as Section 5(2)(b) of the Value Added Tax Cap 349. This window commenced on April 15, 2024, marking the start of a two-month period during which applications will be accepted, concluding on June 14, 2024.

In a move towards modernization and efficiency, the application process has been made exclusively online. This means no physical applications will be entertained. It's a clear step forward in utilizing technology to streamline bureaucratic processes.

Applicants should be aware that the exemption is not guaranteed. A compliance checklist will be the standard for vetting, ensuring that only those who adhere to tax regulations benefit from the exemption. Once granted, the exemption remains valid for a full year, starting from July 1, 2024, to June 30, 2025. However, it's important to note that this status is not set in stone; failure to maintain compliance can result in automatic revocation.

The URA Web Portal serves as the hub for this process. Here, applicants can validate the issued certificate by verifying the existence of their Tax Identification Number (TIN) on the WHT Exemption list. This digital approach reinforces the importance of maintaining up-to-date tax records and encourages a proactive stance in managing tax affairs.

For those ready to apply, the process is straightforward:

Access the URA web portal.
Log in with your TIN and password.
Navigate to e-Services, select Tax Exemption, and choose "Withholding Tax Exemption Application."
Follow the self-assessment process and submit your application.
Obtain an acknowledgement receipt with a reference number, which will serve as proof of your application.

WHT EXEMPTION COMPLIANCE CHECKLIST

Do all the directors/associates have Tax Identification Numbers (TIN)?
Is your registration profile up to date including the correct address, tax types, director's details and all required information?
If you are less than 3 years on the tax register, are you importing Plant & Machinery whose CIF value is at least USD 150,000?
Do you have any existing Income Tax exemption? (Attach evidence).
Do you issue EFRIS Invoices/Receipts to all clients? (Applicable to VAT - registered taxpayers).
Do you apply tax stamps to all applicable products? (Applicable to Local Exercise Duty-registered taxpayers).
Do you have a Tax agent as provided for in the Tax Procedures Code Act? If Yes, provide the TIN(s) in the remark.
Are you a Designated Withholding Tax Agent?
Are you deducting and filing WHT by the due date?
Do you declare all your local supplier's TINs in the WHT returns?
Do you file all returns by their due dates?
Are all directors earning monthly salaries declared in the Pay As You Earn (PAYE) returns?
Where directors are not on the payroll and have various sources of income, are they filing individual returns and declaring all source of income?
Do you fully declare all your employees' remunerations in the PAYE return with correct employee TINs?
Have you incurred any expenditure above 5million shillings in one transaction on goods and services from a supplier who does not have a TIN?
Do you remit tax from your suppliers who are not exempt from withholding tax?
Do you provide valid TINs and Names of the landlord in your Income Tax Returns? (Applicable to those incurring rent expenses/expenditure).
Do you pay all your taxes by their due date?
If you are a small taxpayer, is your Total Domestic Tax payment above UGX 50M in recent twelve (12) months?
If you have any outstanding tax liability, are you under any approaved installment plan?
If you dispute your ledger tax balances, have you engaged URA over the disputed tax balances?
If you manufacture/supply alcohol, attach a list of your clients/buyers with their TINs.
Have you ever been investigated by the Tax Investigation Department of URA?