The relevance of the OECD and UN Model Conventions and their Commentaries
for the interpretation of Ugandan tax treaties
Uganda has concluded nine tax treaties. Its tax treaty partners are Denmark,
India, Italy, Mauritius, the Netherlands, Norway, South Africa, the UK and
Zambia. It has also negotiated two tax treaties which are not yet in force: the
treaty with Belgium and the tripartite treaty between and among Kenya, Tanzania
and Uganda.
There is generally no case law, administrative practice or scholarly opinion on
the relevance of the OECD Model Tax Convention on Income and on Capital (OECD
Model) and the United Nations Model Double Taxation Convention between Developed
and Developing Countries (UN Model) and their Commentaries for the
interpretation of the bilateral tax treaties concluded by Uganda.
According to Ugandan law, the Ugandan courts are not obligated to defer to
precedents and commentaries that are not pronounced by courts of record in
Uganda. However, if the commentaries are made by tax experts, such commentaries
would be considered persuasive. In the absence of overriding policy concerns,
the Ugandan courts would be inclined to follow these commentaries when
interpreting bilateral tax treaties concluded byUganda. Such an approach was
adopted by the High Court of Kenya at Nairobi in the case of Unilever
Kenya Ltd v. Commissioner of Income Tax, where the court held that
in the absence of legal provisions to the contrary or specific guidance from
Kenya Revenue Authority on a particular issue, it was prepared to refer to the
OECD principles on income and on capital and the relevant guidelines.