24 November 2011, Sweetcrude, Kampala – UK-based Heritage Oil has lost a $404 million tax battle in Uganda after the country’s tax authority ruled it was liable to pay a disputed capital gains bill.
According to local media reports, the row centres on tax claimed by the government on the $1.45 billion Heritage made from the sale of its Ugandan assets to UK-based Tullow Oil last year.
Heritage said its earnings were not subject to tax because the transaction happened outside of Uganda.
“What was abroad were discussions and signing of documents but the income obtained from the sale of the applicant’s (Heritage) interest arose from activity based in Uganda,” the Daily Monitor newspaper quoted a tribunal ruling document.
“Hence any income derived from the said activity is liable to taxation in Uganda.”
There was no immediate confirmation from the company or the tribunal, according to Reuters news agency.
