LVFTZ Tax Incentives for Domiciled Businesses
To benefit from the generous tax incentives granted to the zone and zone users, the company or business concern has to register in order to qualify as a domiciled legal business entity within the zone. After completing the registration formalities, the zone authority shall notify the Uganda Revenue Authority about the new entrant to the zone. Any business entity duly registered and operating in the FTZ shall by law be exempt from the following:
- Customs duty
- Withholding Tax
- Value-Added Tax (VAT)
- Corporate Income Tax
The importer purchases goods at a lower cost than traveling to Dubai. What this means is three-fold:
- Importers of goods into the Free Trade Zone can resell their goods at prices lower than if they imported and re-sell their goods outside of the zone.
- Wholesalers can purchase goods at much lower prices from importers operating in the Zone.
- Manufacturers producing their goods in the Free Trade Zone would market their goods abroad more competitively in world markets than if they manufactured the same goods outside of the Free Trade Zone because they can import raw-materials and related chemicals, tools, equipment and machinery into the Free Trade Zone at much reduced prices on account that their imports are tax-free.
Goods purchased from the Free Trade Zone and re-sold into the domestic tariff area (DTA) of Uganda, Tanzania, Rwanda, Burundi or any region or area outside the Lake Victoria Free Trade Zone are subject to pay applicable import duties of the domestic tariff area (DTA).
Business entity owners operating in The Lake Victoria Free Trade Zone shall be obliged to advise their buyers and clients to comply with the applicable taxation requirements if the final destination of the goods they buy is outside of the Free Trade Zone.
Fees Payable To The Zone Adminstration:
Betterment Fees: Payable at a rate of 5% on the value of goods imported into the zone and on each service delivered or offered in the zone. The Betterment Fee is for the upkeep and continuous development of the Eco-City in line with the concepts espoused by its ideas and principles.
Construction Permits: Building plans are required to be approved before any construction in the zone. Based on the value of the building a Construction Permit Fee is payable.
Construction Completion Permit: Each building before being occupied, leased, rented-out or used has to be inspected to ensure it conforms to the required building codes. A “Construction Completion Permit” is payable at a rate based on the value of the building.
Annual Building Inspection Permit: Each building has to have a valid annual inspection permit. The "Annual Building Inspection Permit" is payable at a rate based on the value of the building.
Annual Property Fee: Is payable by each building in the zone and is based on the value of the property.
Annual Business License: Is payable by each business domiciled in the zone. The rate payable is based on the nature of the business.