The Double Taxation Relief (Taxes on Income) (Uganda) Order 1993

Made: 20th July 1993

At the Court at Buckingham Palace, the 20th day of July 1993 Present, The Queen’s Most Excellent Majesty in Council

Now, therefore, Her Majesty, in exercise of the powers conferred upon Her by section 788 of the said Act, and of all other powers enabling Her in that behalf, is pleased, by and with the advice of Her Privy Council, to order, and it is hereby ordered, as follows:—

1

This Order may be cited as the Double Taxation Relief (Taxes on Income) (Uganda) Order 1993.

2

It is hereby declared—

• (a) that the arrangements specified in the Convention set out in the Schedule to this Order have been made with the Government of the Republic of Uganda with a view to affording relief from double taxation in relation to income tax, corporation tax or capital gains tax and taxes of a similar character imposed by the laws of Uganda;

• (b) that those arrangements include provisions with respect to the exchange of information necessary for carrying out the domestic laws of the United Kingdom and the laws of Uganda concerning taxes covered by the arrangements including, in particular, provisions about the prevention of fiscal evasion with respect to those taxes; and

• (c) that it is expedient that those arrangements should have effect.

SCHEDULE — CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE REPUBLIC OF UGANDA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS

The Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Uganda;

Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains;

Have agreed as follows:

Article 1 — Personal scope

This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2 — Taxes covered

• (1) The existing taxes which are the subject of this Convention are:

• (a) in the United Kingdom:

• (i) the income tax;

• (ii) the corporation tax; and

• (iii) the capital gains tax;

(hereinafter referred to as “United Kingdom tax”);

• (b) in Uganda, the income tax (including the income tax charged on corporations);

(hereinafter referred to as “Ugandan tax”).

• (2) This Convention shall also apply to any taxes which are imposed by either State in addition to, or in place of, its existing taxes after the date of signature of this Convention and which are identical with, or substantially similar to, existing taxes of either State. The competent authorities of the States shall notify each other of substantial changes which have been made in their respective taxation laws.

Article 3 — General definitions

Article 4 — Fiscal domicile

Article 5 — Permanent establishment

Article 6 — Income from immovable property

Article 7 — Business profits

Article 8 — Shipping and air transport

Article 9 — Associated enterprises

Where:

• (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State; or

• (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State;

and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly.

Article 10 — Dividends

Article 11 — Interest

Article 12 — Royalties

Article 13 — Technical Fees

Article 14 — Capital gains

Article 15 — Independent personal services

Article 16 — Dependent personal services

Article 17 — Directors' fees

Directors' fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 18 — Artistes and athletes

Article 19 — Pensions

Article 20 — Government service

Article 21 — Students

Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 22 — Income not expressly mentioned

Items of income of a resident of a Contracting State, wherever arising, other than income paid out of trusts, which are not dealt with in the foregoing Articles of this Convention shall be taxable only in that State.

Article 23 — Elimination of double taxation

Article 24 — Non-discrimination

Article 25 — Mutual agreement procedure

Article 26 — Exchange of information

Article 27 — Diplomatic agents and consular officials

Article 28 — Entry into force

Each of the Contracting States shall notify to the other the completion of the procedures required by its law for the bringing into force of this Convention. The Convention shall enter into force on the date of the later of these notifications and shall thereupon have effect:

• (a) in the United Kingdom:

• (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the later of these notifications is given;

• (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the later of these notifications is given; and

• (b) in Uganda, in respect of income tax (including the income tax charged on corporations), for any assessment year beginning on or after 1st January in the calendar year next following that in which the later of these notifications is given.

Article 29 — Termination

This Convention shall remain in force until terminated by one of the Contracting States. Either Contracting State may terminate the Convention, through the diplomatic channel, by giving notice of termination at least six months before the end of any calendar year beginning after the expiration of five years from the date of entry into force of the Convention. In such event, the Convention shall cease to have effect:

• (a) in the United Kingdom:

• (i) in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given;

• (ii) in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given; and

• (b) in Uganda, in respect of income tax (including the income tax charged on corporations), for any assessment year beginning on or after 1st January in the calendar year next following that in which the notice is given.

Signed

N. H. Nicholls — Clerk of The Privy Council

Explanatory note

(This note is not part of the Order)

The Convention with Uganda is set out in the Schedule to this Order.

The Convention provides for business profits not arising through a permanent establishment to be taxed only in the country of the taxpayer’s residence. Profits attributable to a permanent establishment may be taxed in the country in which the permanent establishment is situated (Articles 5 and 7).

Income from immovable property may be taxed in the country in which the property is situated (Article 6).

Shipping and air transport profits are generally to be taxed only in the residence state of the operator (Article 8).

The Convention includes rules for determining taxable profits when a company in one country is related to a company in the other (Article 9).

The rate of tax imposed in the country of source on dividends derived by a resident of the other is not to exceed 15 per cent of the gross amount of the dividends (Article 10).

The rate of tax imposed in the country of source on interest derived by a resident of the other country is not to exceed 15 per cent of the gross amount flowing to the other country. Certain categories of interest (e.g. interest paid to the Government of the other country) will be exempt from tax in the source state (Article 11).

The rate of tax imposed in the source country on royalties is limited to 15 per cent where the beneficial owner is a resident of the other country (Article 12).

The rate of tax on technical fees arising in one country and paid to a resident of the other country is not to exceed 15 per cent of the gross amount (Article 13).

Capital gains derived from immovable property may be taxed in the country in which the property is situated. Moveable property which is part of a permanent establishment or fixed base that an enterprise resident in one state has in the other state may be taxed in the other state, although gains from the alienation of ships or aircraft operated in international traffic are taxable only in the country of residence of the operator (Article 14).

The earnings of temporary business visitors are, subject to certain conditions, to be taxed only in the country of the taxpayer’s residence (Articles 15 and 16). Fees received by a resident of one country in his capacity as a director of a company resident in the other country may be taxed in the other country (Article 17). Income derived from the activities of artistes and athletes may be taxed in the country in which those activities are performed, although special rules apply to visits supported by public funds (Article 18). Occupational pensions (other than those paid in respect of government service) and annuities are to be taxed only in the recipient’s country of residence (Article 19) while government service salaries and pensions are normally to be taxed only by the paying Government (Article 20). Payments made to visiting students, apprentices and business trainees are generally exempt from tax in the country visited (Article 21). Other income (with the exception of income from trusts and estates of deceased persons under administration) not specified in the Convention remains taxable only in the recipient’s country of residence (Article 22).

Where income continues to be taxable in both countries credit will be given in the taxpayer’s country of residence for tax imposed by the other country. The credit to be given in the United Kingdom for tax imposed in Uganda includes credit for tax spared under certain provisions of Ugandan law (Article 23).

There are provisions safeguarding nationals and enterprises of one country against discriminatory taxation in the other country (Article 24), and for consultation (Article 25) and exchanges of information (Article 26) between the taxation authorities of the two countries.

The Convention will enter into force when the legislative procedures of both countries have been completed and they have each notified the other of this. The Convention takes effect in the United Kingdom, for corporation tax on the 1st April and for income tax on the 6th April, in the next calendar year after the later of the two notifications. The date of entry into force will in due course be published in the London, Edinburgh and Belfast Gazettes.

Footnotes

[^f00001]: 1988 c. 1; section 788 is extended by section 277 of the Taxation of Chargeable Gains Act 1992 (c. 12)