The applicable rate for non-individuals including resident and non-resident companies is 30%. Chargeable income of a trust and retirement fund is taxed at a rate of 30%.
The rates applicable to a mining company range between 25% and 45%.
Uganda does not have capital gains tax, gains arising on the disposal of a non-depreciable business asset are included in gross chargeable income and treated as normal business income subject to income tax at the rate of 30%. The loss arising from such disposal is allowed as a deduction. In addition, with effect from July 2014, any non-resident individual who disposes of a commercial property that is in Uganda is subject to withholding tax of 10% of the proceeds from the sale and this becomes final tax on the non-resident person.
This is tax that is charged for each year of income upon the income of an individual whether resident or non-resident. Resident persons in Uganda are taxed on worldwide income i.e. income derived from both Uganda and all over the World; however, a non-resident person is taxed on only income sourced in Uganda. An exception to this rule applies to a short term resident who is a person available in Uganda for less than two years.
An individual is resident for tax purposes if;
a) for a period or periods amounting in the aggregate to 183 days or more in that year of income; or
b) during the year of income and in each of the two preceding years of
c) income for periods averaging more than 122 days in each year of income; or
d) income for periods averaging more than 122 days in each year of income; or
e) is an employee or official of the Government of Uganda posted abroad during the year of income
A Company is resident for tax purposes if;
1 Information about “residence of an individual” has been extracted from Section 9 of the Income Tax as amended in 2017.
2 Information about “residence of a company” has been extracted from Section 10 of the Income Tax as amended in 2017.
This is applicable to small businesses whose gross annual turnover is less than 150millions. It applies to both individuals and non-individuals like companies.
The amount of tax payable for purposes where gross turnover is more than 50 million is taxed as follows3:
|Where the gross turnover of the taxpayer exceeds Ushs.50 million but does not exceed Ushs. 75 million per annum||Ushs. 937,500 or 1.5% of the gross turnover, whichever is lower|
|Where the gross turnover of the taxpayer exceeds Ushs.75 million but does not exceed Ushs. 100 million per annum||Ushs. 1,312,500 or 1.5% of the gross turnover, whichever is lower|
|Where the gross turnover of the taxpayer exceeds Ushs.100 million but does not exceed Ushs.125 million per annum||Ushs. 1,687,500 or 1.5% of the gross turnover, whichever is lower|
|Where the gross turnover of the taxpayer exceeds Ushs.125 million but does not exceed Ushs.150 million per annum||Ushs. 2,062,500 or 1.5% of the gross turnover, whichever is lower|
The amount of tax payable for purposes where gross turnover is less than Ushs. 50m is as follows based on the location and type of goods or services offered by the business. The taxes range as per location is as follows;
3 This Tax summery table was extracted from the second schedule part 1 of the income tax as amended in 2007.
Tax rate applicable to resident individuals4:
|Chargeable Income per Annum||Rate of Tax|
|0 – 2,820,000||Nil|
|2,820,000 – 4,020,000||10% of the amount by which chargeable income exceeds Ushs. 2,820,000(Ushs. 235,000 pm)|
|4,020,000 – 4,920,000||Ushs. 120,000 (Ushs. 10,000 pm) plus 20% of the amount by which chargeable income exceeds Ushs. 4,020,000 (Ushs. 335,000 pm)|
|Over 4,920,000||a) Ushs. 300,000 (Ushs. 25,000 pm) plus 30% of the amount by which chargeable income exceeds Ushs. 4,920,000(Ushs. 410,000 pm), and
b) Where the chargeable income of an individual exceeds Ushs. 120,000,000 (Ushs. 10,000,000 pm) an additional 10% charged on the amount by which chargeable income exceeds Ushs. 120,000,000 (Ushs. 10,000,000 pm)
Tax rate applicable to non-resident individuals5:
|Chargeable Income per Annum||Rate of Tax|
|0 – 4,020,000||10%|
|4,020,000– 4,920,000||Ushs 402,000 plus 20% of the amount by which chargeable income exceeds Ushs. 335,000|
|Over 4,920,000||a) Ushs. 582,000 plus 30% of the amount by which chargeable income exceeds Ushs. 410,000, and
b) Where the chargeable income of an individual exceeds Ushs. 120,000,000 an additional 10% charged on the amount by which chargeable income exceeds Ushs. 120,000,000
4 This Tax summery table for resident individuals was extracted from the Third schedule part 1 (1) of the income tax as amended in 2007.
5 Extracted from the Third schedule part 1(2) of the income tax as amended in 2007.
All companies are now required to submit self-assessments returns online using the eTax system. Individuals whose only source of income is employment from one employer, whose income has been withheld at source by the withholding agent, are not required to file return.
Income tax returns are due after 6 months from the person’s end of accounting period and failure to comply with this attracts a penalty of UGX 200,000 per month for the time the return is late or 2% percent simple interest of the tax payable for that year per month, whichever is greater. The due date for payment is the same for returns of income. Interest on late payment is 2% per month (Simple interest)
Both companies and individuals are required to submit provisional estimates of income (indicating estimated tax payable) within the first six months for companies and four months for individuals from the beginning of their accounting period. The estimated tax is payable in two equal instalments for companies and 4 equal instalments for Individuals, the due date for payment is follows as follows: –
6 Extracted from section 111(4) of the Income Tax Act as amended 2017.
Other than exempt good and services, Value Added Tax (VAT) is charged on the following;
7 Extracted from Section 4 (a), (b), (c) of the Value Added Tax Act.
The applicable rates are:
|VAT as a fraction of the inclusive price (standard rate)||9/59|
|Annual turnover threshold for registration||150,000,000|
All exports from Uganda to other countries attract no tax; Goods imported into Uganda from Tanzania and Kenya are also not subject to import duty. Goods will only enjoy this preferential tariff treatment if they meet the EAC Customs Union Rules of Origin. The customs value is essential to determine the duty to be paid on imported goods. There are different import duty rates which apply to different items, the lowest being 0%, others include 10%, 25% and 30%. For motor vehicles, the tax body does not use the invoice value to calculate the Customs value; but uses the Motor Vehicle Indicative Values (i.e. a list of predetermined customs values for all motor vehicles) and uses the invoice value of goods to determine customs value except where there is no invoice or the tax body suspects an under-declaration of the invoice value, then it will use other methods to determine the customs value.
Uganda has both a specific and ad valorem excise regime.
Excise duty on imported goods is payable prior to clearance through Customs. However, not all imported items attract excise duty; there are specific items like Alcohols, wines and spirits, Jewellery, cement, air time, cigarettes, bank transaction fees and all soft drinks
In addition, petrol and kerosene, the following excise duty amendments were proposed:
Excise duty on sugar was increased from 25 shillings to 50 shillings
Excise duty is quoted in both Uganda shillings (UGX), US dollars (USD) and percentage (%) with the following ranges;
A composite sum is determined and charged for a quantitative description of goods e.g. $1 per kilogram. The custom value of the goods does not need to be determined, as the duty is not based on the value of the goods
Duties are levied according to the value of goods and are usually expressed as percentages of the value in order to arrive at the amount payable on an imported item. The rules are based on the customs valuation agreement.
Stamp duty is a duty paid to legalise documents in Uganda, any document without a stamp duty is not acceptable in courts of law, and instruments are as listed below. Stamp duty is payable on specified instruments is either Ad valorem (at a percentage) or fixed. This duty is most executed on various instruments by banks/ financial institutions, insurance companies, Registrar General’s Office, Registrar of Titles, Commissioners of Oaths, Administrator General, Hire Purchase Companies and Bonded Ware Houses.
Stamp duty is also administered by Uganda’s tax body and its self-assessment which will be through the issuance of an e-Stamp from the tax body effective 1st September 2012.
Common instruments with fixed stamp duty rate:
|01||Affidavit including an affirmation or declaration||10,000|
|02||Agreement or Memorandum of an agreement||10,000|
|03||Articles of Association of a Company||10,000|
|04||Cancellation of instrument||10,000|
|06||Caveat (Under the Registration of Titles Act)||10,000|
|07||Memorandum of Association of a Company||10,000|
|09||Policy of insurance||35,000|
|10||Power of Attorney||10,000|
|12||Release of Instrument||10,000|
|13||Solemn or Statutory declaration||10,000|
Common instruments attracting an Ad valorem rate:
|01||Debenture||0.5% of total value|
|02||Equitable Mortgage||0.5% of total value|
|03||Gift||1% of total value|
|04||Hire purchase Agreement||1% of total value|
|05||Lease||1% of total value|
|06||Mortgage Deed||0.5% of total value|
|07||Security Bond or Mortgage Deed||1% of total value|
|08||Transfer||1.5% of total value|
Uganda has DTAs with a number of countries that include; South Africa, United Kingdom, Mauritius, Zambia, Italy, Norway, Denmark, India, Netherlands, UAE, Seychelles, EAC, and Egypt with tax rates ranging from 0%(exempt) to 15% on Dividends, Royalties, Interest and Management & Professional fees.