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ACTS SUPPLEMENT No. 9 5th November, 2010. ACTS SUPPLEMENT to The Uganda Gazette No. 66 Volume CIII dated 5th November, 2010. Printed by UPPC, Entebbe, by Order of the Government.v |
Act 24 Income Tax (Amendment) Act 2010 THE INCOME TAX (AMENDMENT) ACT, 2010 |
ARRANGEMENT OF SECTIONS |
Section |
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1. |
Commencement |
2. |
Amendment of section 21 of the Income Tax Act |
3 . |
Amendment of section 40 of principal Act |
4. |
Amendment of section 89A of principal Act |
5. |
Amendment of section 89B of principal Act |
6. |
Amendment of section 89C of principal Act |
7. |
Amendment of section 89E of principal Act |
8. |
Amendment of section 89F of principal Act |
9. |
Amendment of section 89 G of principal Act |
10. |
Amendment of section 89 H of principal Act |
11. |
Substitution of section 89I of principal Act |
12. |
Amendment of section 89J of principal Act |
13. |
Repeal of section 89K of principal Act |
14. |
Insertion of new section 89KA |
15. |
Repeal of section 89L of principal Act |
16 |
Repeal of section 89M of principal Act |
17. |
Insertion of new section 89MA |
18. |
Repeal of section 89N of principal Act |
19. |
Substitution of section 890 of principal Act |
20. |
Insertion of new section 890A |
21. |
Substitution of section 89P of principal Act |
22 |
Repeal of section 89Q of principal Act |
23 |
Insertion of new sections 89QA, 89QB and 89QC |
24. |
Amendment of section 119 of principal Act |
25. |
Amendment of section 119A of principal Act |
26. |
Amendment of Third Schedule to principal Act |
27. |
Amendment of Eighth Schedule to principal Act |
1 |
Act 24 |
Income Tax (Amendment) Act |
2010 |
THE INCOME TAX (AMENDMENT) ACT, 2010 An Act to amend the Income Tax Act, Cap. 340 Date of Assent: 19th October, 2010. Date of Commencement: See section 1. Be it enacted by Parliament as follows:
Section 21 of the income Tax Act, in this Act referred to as the principal Act, is amended in subsection (1) by substituting for paragraph (k) the following— “(k) any capital gain that is not included in business income, other than gains on the sale of shares in a private limited liability company;”
The principal Act is amended in section 40 by substituting for subsection (3), the following— |
2 |
Act 24 Income Tax (Amendment) Act 2010 “(3) A taxpayer who intends to change the taxpayer's method of accounting shall apply in writing to the commissioner and the commissioner may, by notice in writing, approve the application where he or she is satisfied that the change is necessary to clearly reflect the taxpayer's income.”
The principal Act is amended in section 89A—
““allowable contract expenditures” means the deductions that may be allowed for the purposes of ascertaining chargeable income from petroleum operations; “barrel” means a quantity consisting of forty-two (42) United States gallons, liquid measure, corrected to a temperature of sixty degrees (60°) Fahrenheit;”
““commercial production” means the production of crude oil or natural gas or both and delivery of the crude oil or natural gas at the delivery point under a programme of regular production and sale;”;
““contract area” means an area that is the subject of a petroleum agreement and, where any part of that area is relinquished under the petroleum agreement, the contract area is the area which remains the subject of the petroleum agreement;”; 3 |
Act 24 Income Tax (Amendment) Act 2010 |
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““contractor” means a person with whom the Government enters into a petroleum agreement and includes a licensee;”;
““cost oil” means a contractor's entitlement to production as cost recovery under a petroleum agreement;”;
““petroleum revenues” means tax charged on income derived by a person from petroleum operations, Government share of production, signature bonus, surface rentals, royalties, proceeds from sale of Government share of production, and any other duties or fees payable to the Government from contract revenues under the terms of a petroleum agreement;”;
““year of income” is the period of twelve months ending on 31st December; and includes a substituted year of income as defined by section 39.”
Section 89B of the principal Act is amended by inserting immediately after subsection (2), the following— “(3) Income earned by a contractor from activities other than petroleum operations shall be taxed in accordance with this Act. |
4 |
Act 24 Income Tax (Amendment) Act 2010
Section 89C of the principal Act is amended—
“(2) Where, in any year of income, the total deductions of a contractor in relation to petroleum operations undertaken in a contract area exceed the cost oil for that year of income arising from those operations in the contract area, the excess shall be carried forward to the next following year of income and is deductible for that year of income against the cost oil for that year of income arising from the petroleum operations in the contract area until the excess is fully deducted or the petroleum operations in the contract area cease.”
Section 89E of the principal Act is amended in subsection (4) by substituting for “gross income of the contractor”, the words “contractor's production share”.
The principal Act is amended by substituting for section 89F the following— “89F. Allowable contract expenditures The expenditures that may be deducted for the purposes of ascertaining the chargeable income of the contractor from petroleum operations are prescribed in the Eighth Schedule to this Act.” |
5 |
Act 24 Income Tax (Amendment) Act 2010 |
The principal Act is amended by substituting for section 89G the following— “89G. Transfer of interest in a petroleum agreement Where a contractor, in this Part referred to as the “transferor contractor” disposes of an interest in a petroleum agreement to another contractor or a person that as a result of the disposal will become a contractor in relation to those operations, in this Part referred to as the “transferee contractor”—
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6 |
Act 24 Income Tax (Amendment) Act 2010 |
(ii) the depreciation of capital expenditure incurred up to the date of disposal that is deductible by the transferee contractor under paragraph (b); and
The principal Act is amended by substituting for section 89H the following— “89H. Withholding tax
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7 |
Act 24 Income Tax (Amendment) Act 2010 |
The principal Act is amended by substituting for section 89I the following— “89I. Accounting principles
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8 |
Act 24 Income Tax (Amendment) Act 2010 |
(aa) for the period from the first of the calendar month to the day when the increase or decrease is first reached, the average of the official buying and selling exchange rates between the United States Dollar, the Uganda Shilling or the currency in question as issued on the last day of the previous calendar month. (ab) for the period from the day on which the increase or decrease is first reached to the end of the calendar month, the average of the official buying and selling exchange rates between the United States Dollar, the Uganda Shilling or the currency in question as issued on the day on which the increase or decrease is reached.
Section 89J of the principal Act is amended by inserting immediately after the existing provision, the following— “(2) Any exploration, development or production expenditure associated with a unit development involving a discovery area which extends into a neighbouring country or licence or both shall be allocated on the basis of the petroleum reserves attributable to that portion of the discovery area located in Uganda or licence or both.” |
9 |
Act 24 Income Tax (Amendment) Act 2010
The principal Act is amended by repealing section 89K.
The principal Act is amended by inserting immediately after section 89K the following— “89KA.Valuation and measurement of petroleum For the purposes of determining the value of petroleum derived from petroleum operations from a contract area, petroleum shall be valued and measured in accordance with the regulations prescribed by the Minister which shall be laid before Parliament.”
The principal Act is amended by repealing section 89L.
The principal Act is amended by repealing section 89M.
The principal Act is amended by inserting immediately after section 89M the following— “89MA. Application of Parts XI, XIV, XV and XVI Parts XI, XIV, XV and XVI of this Act apply subject to the modifications in this Part, to a contractor in respect of—
The principal Act is amended by repealing section 89N. 10 |
Act 24 Income Tax (Amendment) Act 2010 |
The principal Act is amended by substituting for section 89O the following— “89O Returns
11 |
Act 24 Income Tax (Amendment) Act 2010
The principal Act is amended by inserting immediately after section 89O the following— “89OA.Application of sections 95, 96 and 97
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12 |
Act 24 Income Tax (Amendment) Act 2010
The principal Act is amended by substituting for section 89P the following— “89P. Collection and recovery Sections 103 to 113 and section 136 shall apply to contractors with the following modifications—
13 |
Act 24 Income Tax (Amendment) Act 2010 |
The principal Act is amended by repealing section 89Q.
The principal Act is amended by inserting immediately after section 89Q the following— “89QA. Failure to furnish returns
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14 |
Act 24 Income Tax (Amendment) Act 2010
89QB Making false or misleading statements
15 |
Act 24 Income Tax (Amendment) Act 2010
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89QC. Application of sections 143 to 155 (1) Sections 143 to 155 of this Act apply to a contractor in respect of petroleum revenues and other taxes subject to the following modifications—
89QD. Right of Commissioner to execute mandate Nothing in a petroleum agreement or in any law shall be construed as limiting the right of the Commissioner to execute his or her mandate for purposes of this Act.”
The principal Act is amended in section 119(5) by substituting for paragraph (a), the following— “(a) a supply or importation of petroleum or petroleum products including furnace oil, other than lubricants, cosmetics and fabrics or yarn manufactured out of petroleum products;”. |
16 |
Act 24 Income Tax (Amendment) Act 2010
The Principal Act is amended in section 119A by substituting for subsection (1), the following— “(1) A resident person who pays management or professional fees to a resident professional shall withhold tax on the gross amount of the payment at the rate prescribed in Part VIII of the Third Schedule.”
The Third Schedule to the principal Act is amended by inserting immediately after Part VIII, the following new Parts— S.89B “Part IX Income Tax Rate for Contractors The income tax rate applicable to contractors under section 89B is 30%. S. 89H (1) Part IXA Income Tax Rate for Resident Contractors The income tax rate payable on a participation dividend paid by a resident contractor to a non-resident company is 15%. Part IXB S. 89H (2) Income Tax Rate for Non- Resident Contractors The income tax rate payable by a non- resident subcontractor deriving income under a Uganda sourced services contract is 15%.” |
17 |
Act 24 Income Tax (Amendment) Act 2010 |
The Eighth Schedule to the principal Act is amended— |
“interest and other financial charges incurred on loans raised by the contractor”; and
“(d) materials purchased from affiliated companies of the contractor shall be charged at prices not higher than the following—
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18 |
Act 24 |
(e) |
Income Tax (Amendment) Act 2010
by repealing subparagraphs (3) (e), (f), (g), (h), (i), (j) and (k). |
19 |
Act 24 Income Tax (Amendment) Act Cross References The Petroleum (Exploration and Production) Act, Cap. 150. |
2010 |
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