The relevance of the OECD and UN Model Conventions and their Commentariesfor 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 andZambia. It has also negotiated two tax treaties which are not yet in force: thetreaty with Belgium and the tripartite treaty between and among Kenya, Tanzaniaand Uganda.

There is generally no case law, administrative practice or scholarly opinion onthe relevance of the OECD Model Tax Convention on Income and on Capital (OECDModel) and the United Nations Model Double Taxation Convention between Developedand Developing Countries (UN Model) and their Commentaries for theinterpretation of the bilateral tax treaties concluded by Uganda.

According to Ugandan law, the Ugandan courts are not obligated to defer toprecedents and commentaries that are not pronounced by courts of record inUganda. However, if the commentaries are made by tax experts, such commentarieswould be considered persuasive. In the absence of overriding policy concerns,the Ugandan courts would be inclined to follow these commentaries wheninterpreting bilateral tax treaties concluded byUganda. Such an approach wasadopted by the High Court of Kenya at Nairobi in the case of UnileverKenya Ltd v. Commissioner of Income Tax, where the court held thatin the absence of legal provisions to the contrary or specific guidance fromKenya Revenue Authority on a particular issue, it was prepared to refer to theOECD principles on income and on capital and the relevant guidelines.