The short answer
VAT in Uganda is a consumption tax charged at a flat 18 percent on most goods and services. A business must register once its annual taxable turnover passes UGX 300 million, a threshold that doubled from UGX 150 million from 1 July 2026. Once registered, the business charges VAT on its sales (output tax), reclaims the VAT it paid on its own business purchases (input tax), and pays URA the difference between the two, or claims a refund if input tax is higher.
VAT-registered businesses file a return and pay any VAT due by the 15th of the following month, every month, backed by the EFRIS e-invoices or e-receipts that record each sale. Miss a return and the default penalty is UGX 200,000, plus interest of 2 percent a month, compounded, on anything still unpaid. This page explains the rules in plain language. It is not tax advice: for a decision on your own numbers, confirm with URA or a tax adviser.
VAT basics: what it is and who charges it
What is VAT
Value Added Tax is a tax on the value added at each stage of selling goods or services in Uganda. A VAT-registered seller adds VAT to the price it charges a customer, collects it on URA's behalf, and separately reclaims the VAT it paid on its own taxable purchases. The seller only ever keeps the difference for URA, not the whole amount charged.
The 18 percent rate
The standard rate is 18 percent, and it has not changed. To find the VAT inside a VAT-inclusive price, multiply by 18/118. To add VAT to a price that excludes it, multiply by 1.18. A price of UGX 118,000 including VAT contains UGX 18,000 of VAT on a net price of UGX 100,000. Most goods and services are standard-rated; a shorter list is exempt or zero-rated instead, covered on vat-exempt-vs-zero-rated-uganda. For quick sums on your own prices, use our vat-calculator-uganda.
Output tax and input tax
Output tax is the VAT a business charges on its own taxable sales. Input tax is the VAT it pays on its own business purchases. VAT payable to URA in a month equals output tax minus input tax. If input tax is higher than output tax in a period, the business carries the excess forward or, above a threshold, claims a cash refund.
The invoice a buyer needs
A VAT-registered seller issues an EFRIS e-invoice; a seller who is not VAT-registered issues an EFRIS e-receipt instead. For a business purchase, the document should carry the buyer's Business Registration Number, National Identification Number or TIN. Keep every e-invoice and e-receipt: without one, the cost cannot properly support an input VAT claim. See efris-uganda-guide for how EFRIS itself works.
VAT registration: the UGX 300 million threshold
A business must register for VAT once its annual taxable turnover exceeds UGX 300 million. This threshold took effect on 1 July 2026 under the Value Added Tax (Amendment) Act 2026, doubling the previous UGX 150 million threshold that applied until 30 June 2026.
- Turnover above UGX 300 million a year: registration is compulsory.
- Turnover below UGX 300 million: registration is voluntary, and some businesses register anyway so they can reclaim input VAT or look more credible to VAT-registered customers.
- Already registered and now below the new threshold: you can apply online through the URA portal to deregister, subject to URA reviewing your records.
Deregistering stops your monthly VAT returns and stops you charging VAT, but it also ends your right to claim input VAT. Think that through before you apply, especially if most of your customers are VAT-registered businesses that expect an e-invoice.
The old rules also required registration once turnover passed UGX 37.5 million in any three consecutive months. URA has not yet published the equivalent three-month figure that goes with the new UGX 300 million annual threshold. If your turnover is seasonal or lumpy, treat this as an open question and confirm the current position with URA before you decide not to register. For the fuller list of what changed in 2026, see uganda-tax-changes-2026; for the registration steps themselves, see how-to-register-for-vat-uganda.
Running VAT: returns, payments and records
Every VAT-registered business files a monthly VAT return and pays any VAT due within 15 days of the end of the month, in practice by the 15th of the following month. File on time even if you cannot pay the full amount immediately: the filing penalty and the payment interest are separate, and filing late adds a flat penalty on top of whatever interest builds on the unpaid tax.
| VAT duty | When it falls due | Deadline | Penalty for missing it |
|---|---|---|---|
| File the monthly VAT return | End of each calendar month | 15th of the following month | UGX 200,000 default penalty |
| Pay the VAT due for the month | End of each calendar month | 15th of the following month | 2% per month interest, compounded, on the unpaid amount |
| Claim an input tax credit | Date of the purchase invoice | Within 6 months of that invoice date | Claim is at risk of being disallowed |
| Apply for a cash VAT refund | Excess input tax over UGX 5,000,000 in a tax period | Within 3 years of that tax period | Refund claim lapses |
Keep your sales and purchase records, your EFRIS e-invoices and e-receipts, and your monthly workings in good order so you can support every return if URA asks. When an earlier sale needs correcting, cancelling or reducing, raise a credit note against the original e-invoice or e-receipt in EFRIS rather than simply adjusting your own books; URA now recognises the credit note in the same month as the original invoice. Our reading of the available guidance is that a business can apply to URA for VAT relief on a bad debt once it has been outstanding for at least 2 years and reasonable steps were taken to recover it. Confirm the exact process and form with URA before filing that kind of claim.
Imported services, refunds and VAT withholding
Imported services: the reverse charge
VAT on an imported service works as a reverse charge: the Ugandan recipient pays the 18 percent VAT, not the foreign supplier, and cannot claim that tax back as input VAT. Since 1 July 2022, an imported service is treated as exempt from this charge if the same service would have been exempt had it been supplied inside Uganda.
Refunds and carry-forward
If your input tax exceeds your output tax by more than UGX 5,000,000 in a tax period, you can apply to URA for a cash refund of the excess, within 3 years of that tax period. Below that threshold, the excess is normally carried forward to reduce future VAT bills instead of refunded in cash.
VAT withholding
URA designates certain large taxpayers and government bodies as VAT withholding agents. Our reading of the available guidance, not yet confirmed on a URA page we could fetch, is that when a designated agent buys taxable goods or services worth more than UGX 1,000,000 from a VAT-registered supplier, it withholds VAT at 6 percent of the VAT-exclusive invoice value and pays that straight to URA instead of to the supplier. Confirm the exact rate and threshold with URA before relying on them. What is confirmed is that from 1 July 2026, this withholding no longer applies where the supplier issues the agent a proper EFRIS e-invoice or e-receipt, since the tax is already documented.
Advanced VAT: mixed supplies, disallowed input tax and EFRIS
Apportionment for mixed supplies
A business that makes both taxable and exempt supplies can only claim input VAT on the taxable part of the business; input VAT relating solely to exempt supplies cannot be claimed at all. We could not confirm one exact apportionment formula or percentage method published by URA for splitting shared costs between the two. If you make mixed supplies, agree your apportionment method with URA or a tax adviser rather than guessing, and keep that agreement on file.
Input tax you cannot claim
- The purchase, repair, maintenance or spare parts of a passenger vehicle, unless your business itself trades in vehicles or vehicle parts.
- Entertainment, unless your business trades in entertainment, or it is meals or refreshments provided to your own staff on your premises for their benefit.
- Costs relating to electronic services. Guidance we found states this as a bare rule without defining "electronic services" further; ask URA or your adviser if it affects a specific cost.
See input-vat-claim-uganda for the full mechanics of making a valid claim, including the 6 month time limit from the invoice date.
No e-invoice, no deduction
Income Tax Act section 22(3)(m) is the rule that ties EFRIS to your tax bill directly: if a supplier was required to use EFRIS and did not give you a valid e-invoice or e-receipt, you cannot deduct that cost for income tax, and in practice cannot properly support an input VAT claim on it either. On a UGX 5 million cost with no EFRIS document, that is roughly UGX 1.5 million of extra income tax at the 30 percent company rate, on top of losing the input VAT. Always ask for the e-invoice or e-receipt before you pay.
Penalties and interest for getting VAT wrong
Miss a VAT return and the default penalty is UGX 200,000. Unpaid VAT then attracts interest of 2 percent a month, compounded, for every month or part month it stays unpaid, on top of the tax itself. From 1 July 2026, failing to issue a required EFRIS e-invoice or e-receipt, failing to use EFRIS at all when required, or tampering with a fiscal device, carries its own penalty of double the tax due or UGX 200,000, whichever is higher. That replaced older fixed minimums of UGX 6 million to 8 million, so if you have seen those larger figures quoted online, they are out of date.
If you disagree with an assessment or a penalty, you can object to it rather than simply pay. We cover how that process works, and what EFRIS-specific disputes tend to look like, on vat-and-efris-disputes-uganda.
If a VAT problem is already live
If a penalty has already landed, read the notice itself first: it will state its own deadline to respond or pay, which is often shorter than a routine 30 day objection window, so do not assume. If URA has asked for records, pull together your EFRIS e-invoices and e-receipts, your sales and purchase records and your past VAT returns for the exact period named, and reply by the date on the letter. If your filing deadline is only days away, file what you can by the 15th anyway: a late return draws the UGX 200,000 default penalty and 2 percent monthly interest on any unpaid tax regardless of the reason, and the position only gets more expensive the longer it runs.
You can handle all of this yourself through the URA e-Tax portal or by calling URA directly. Growth Informer Software Services is registered with URA as a tax agent, and if you would rather hand it to someone else, we help with EFRIS and VAT set up and training on your own systems, monthly VAT return filing, responding to a penalty or assessment, objections, and representation in a dispute. We quote for that work after seeing your notice or your books, never before. This is general information, not tax advice: for a ruling on your own situation, go to URA or a tax adviser.
Frequently asked questions
What is VAT in Uganda?
VAT (Value Added Tax) is a consumption tax charged in Uganda at a flat 18 percent on most goods and services. VAT-registered businesses charge it on their sales, reclaim it on their own business purchases, and pay URA the difference.
What is the VAT rate in Uganda?
The standard VAT rate is 18 percent, and it has not changed in the 2026 tax amendments. A shorter list of goods and services is exempt or zero-rated instead of standard-rated.
What is the VAT registration threshold in Uganda?
From 1 July 2026, a business must register for VAT once its annual taxable turnover exceeds UGX 300 million. That doubled from the previous UGX 150 million threshold, which applied until 30 June 2026. Registration below the threshold is voluntary.
How does VAT work in Uganda?
A VAT-registered business charges VAT on its taxable sales (output tax) and reclaims the VAT it paid on its own business purchases (input tax). It pays URA the difference each month, or carries forward or claims a refund if input tax is higher.
What is the difference between output tax and input tax?
Output tax is the VAT you charge customers on your own sales. Input tax is the VAT you pay suppliers on your own business purchases. VAT payable to URA equals output tax minus input tax.
When is the VAT return due in Uganda?
VAT-registered businesses must file their monthly return and pay any VAT due within 15 days of the end of the month, in practice by the 15th of the following month. Missing it brings a UGX 200,000 default penalty plus 2 percent monthly interest on unpaid tax.