Facebook (Meta) has issued a notice that from October 2022, WhatsApp Business services in Uganda are subject to VAT. This follows an announcement from the Uganda Revenue Authority (URA) in July 2022 that it was starting the collection of VAT from non-resident electronic service providers effective 1 July 2022. Under the requirements, non-resident providers of electronic services to non-taxable (non-VAT registered) persons in Uganda are required to account for VAT on a quarterly basis and submit a VAT return on the 15th day of the month following the end of each quarter. However, the requirements do not apply for supplies of electronic services to taxable persons because they are required to account for VAT through reverse charge. This approach is confirmed in the Facebook release, which essentially explains that VAT will be applied for customers that have not added a tax identification number to their account. For customers that have added a tax identification number to their account, VAT will not be applied and the customer is responsible for self-assessing and paying the VAT due (reverse charge).
Meta Business Help Center
About Uganda Value-added Tax (VAT)
Beginning October 2022, WhatsApp Business services in Uganda are subject to a value added tax (VAT) at the applicable local tax rate. This applies to customers whose 'Sold To' country on their business or personal address is set to Uganda and who haven't added their Tax Identification Number (TIN) to their Facebook ad account.
In the Payment Settings, you can add your TIN so it's shown on your ads receipts. If you add your TIN to your account:
- Meta doesn't add VAT to your purchase of WhatsApp Business services, and
- You're responsible for self-assessing and paying Uganda VAT under reverse charge in accordance with Section 5(1)(c) of Uganda Value Added Tax Law.
In accordance with the Uganda Tax Procedures Code Act, Meta is required to share your information with the Uganda Revenue Authority.
VAT is added whenever you're charged for your ads, regardless of whether you're purchasing WhatsApp Business services for business or personal purposes. Because VAT is added on top of charges, you won't reach your billing threshold faster, but you may be charged more than your billing threshold amount. If you pay for Facebook ads with a manual payment method, VAT is accounted for at the applicable rate when your ad account is funded to determine the total balance available.
Note: Meta isn't able to give tax advice. If you have a question about taxes, we suggest that you contact your tax advisors or local tax authorities.