Uganda tax officials won their case against TotalEnergies Marketing Uganda about a $14.4 billion tax bill. The Tax Appeals Tribunal decided that money paid to the company's Kenya branch counts as taxable services. TotalEnergies claimed these payments were just reimbursements for import costs. The tribunal disagreed, saying the fees were clearly for services provided by the Kenya office.
The company paid $5.54 per cubic meter of fuel to TotalEnergies Kenya. They argued that most of this money went to other companies like the Kenya Pipeline Company. The tribunal pointed to their service agreement, which called the entire amount a handling fee. They rejected the company's attempt to break down the charge into smaller parts after signing the contract.
This case shows how international companies sometimes use complex arrangements between their offices to avoid taxes. The tribunal ruled that the services didn't qualify for tax exemptions because they weren't directly involved in importing goods. They also decided that the income came from Uganda, according to tax laws.
The ruling upholds the value-added tax assessment and Withholding Tax charges against TotalEnergies. Tax experts say this case highlights the need for better enforcement of rules about services between related companies across borders. The tribunal ordered TotalEnergies to pay all legal costs.
The company paid $5.54 per cubic meter of fuel to TotalEnergies Kenya. They argued that most of this money went to other companies like the Kenya Pipeline Company. The tribunal pointed to their service agreement, which called the entire amount a handling fee. They rejected the company's attempt to break down the charge into smaller parts after signing the contract.
This case shows how international companies sometimes use complex arrangements between their offices to avoid taxes. The tribunal ruled that the services didn't qualify for tax exemptions because they weren't directly involved in importing goods. They also decided that the income came from Uganda, according to tax laws.
The ruling upholds the value-added tax assessment and Withholding Tax charges against TotalEnergies. Tax experts say this case highlights the need for better enforcement of rules about services between related companies across borders. The tribunal ordered TotalEnergies to pay all legal costs.
