Uganda flag Uganda: Business Environment

Tax rates in Uganda

Tax Rates

Consumption Taxes

Nature of the Tax
Value Added Tax (VAT)
Tax Rate
18%
Reduced Tax Rate
Zero-rated supplies include: exports of goods or services from Uganda; international transport of goods or passengers and tickets for their transport; drugs, medicines and medical sundries manufactured in Uganda; educational materials; seeds, fertilizers, pesticides, and hoes; sanitary towels and tampons and inputs for their manufacture; leased aircraft, aircraft engines, spare engines, spare parts for aircraft and aircraft maintenance equipment; the supply of cereals grown and milled in Uganda; the supply of handling services provided by the National Medical Stores in respect of medical supplies, funded by donors.
Exempt items include: livestock, unprocessed foodstuffs and unprocessed agricultural products except wheat grain; postage stamps; financial services; services related to health insurance, life insurance, micro insurance, reinsurance and aircraft insurance services; unimproved land; sale, letting or leasing of certain immovable propertyeducation services; veterinary, medical, dental, and nursing services; imported drugs, medicines and medical sundries; social welfare services; betting, lotteries and games of chance; goods as part of a transfer of a business as a going concern by one taxable person to another taxable person; burial and cremation services; precious metals and other valuables to the Bank of Uganda for the State Treasury; passenger transportation services (other than tour and travel operators); petroleum fuels subject to excise duty (motor spirit, kerosene and gas oil), spirit-type jet fuel, kerosene-type jet fuel and residual oils for use in thermal power generation to the national grid; dental, medical and veterinary goods; selected machinery, tools and implements suitable for use only in agriculture; crop extension services; irrigation works, sprinklers and ready-to-use drip lines; deep cycle batteries, composite lanterns and raw materials for the manufacture of deep cycle batteries and composite lanterns; menstrual cups; agriculture insurance premium or policy; photosensitive semiconductor devices, including photovoltaic devices, regardless of whether they are assembled in modules or made into panels, light-emitting diodes, solar water heaters, solar refrigerators and solar cookers; solar power; life jackets, life-saving gear, headgear and speed governors; any goods or services supplied to the contractors and subcontractors of hydroelectric power projects; movie production; bibles and Qur’ans and textbooks; etc.
Other Consumption Taxes
Goods imported in Uganda are generally subject to customs duties. Excise duties are applied on alcoholic products, based on higher of the specific rate or the ad valorem rate for the goods. Tobacco products and locally manufactured soft drinks are also subject to excise duties. A tax on motor vehicles is also levied.
 
Find out more about Taxes and Accounting in Uganda on GlobalTrade.net, the Directory for International Trade Service Providers.
 

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Corporate Taxes

Company Tax
30%
Tax Rate For Foreign Companies
Resident entities are taxed on their worldwide income, whereas non-resident companies are only subject to taxation on Uganda-source income.
A company is resident in Uganda for tax purposes if it is incorporated or formed under the laws of Uganda, exercises its management and control or undertakes the majority of its operations in Uganda at any time during the tax year.
The chargeable income of a branch of a foreign company in Uganda is taxed at the corporate tax rate of 30%, after the deduction of allowable expenses. In addition to corporation tax, branches are subject to an extra tax at a rate of 15% on any repatriated income for a year of income.
Capital Gains Taxation
Capital gains are taxed as ordinary income and are subject to the corporate income tax rate applicable to the company.
In the case a company located in Uganda experiences a change in ownership by 50% or more, all assets and liabilities are deemed realised.
Main Allowable Deductions and Tax Credits
Deductions may be available for: specific bad debts written off, capital allowances, certain expenses for meals, refreshment or entertainment in the performance of an employee’s duties, charitable donations of no more than 5% of chargeable income, maintenance of property used in the production of income, interest on debt obligations incurred in the production of income, 2% of income tax payable for a private employer that proves to the Uganda Revenue Authority (URA) that 5% of its full-time employees are persons with disabilities and an initial allowance, reinstated at 50% on eligible property outside a 50 km radius from Kampala and 20% on industrial buildings, contributions made by the employer to pension schemes on behalf of the employees. Start-up expenses can be deducted over a period of four years using a straight-line method. Fines, penalties and taxes are generally non-deductible; same as for expenses of a capital nature.
Trading losses, inclusive of capital losses, may be carried forward indefinitely and offset against future trading income. The carryback of losses is not allowed.
Other Corporate Taxes
Other taxes include: stamp duties (0.5%, 1.5%, 2%, or UGX 15,000), environmental levies (20% on motor vehicles that are eight years old or older, from UGX 20,000 to UGX 50,000 per electrical appliances), property taxes determined by local authorities, local service tax (between UGX 5,000 and UGX 100,000 per year) capital duty tax and land transfer tax.
Social security contributions paid by the employer are equal to 10% of the gross salary.
Other Domestic Resources
Uganda Revenue Authority
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Uganda Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 31.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 195.0 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 33.7 47.3 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Personal income tax Progressive rates from 0 to 40%
From UGX 0 to 2,820,000 0%
From UGX 2,820,000 to 4,020,000 10%
From UGX 4,020,000 to 4,920,000 UGX 120,000 + 20%
From UGX 4,920,000 to 120,000,000 UGX 300,000 + 30%
Above UGX 120,000,000 UGX 34,824,000 + 40%
Non-resident individuals
From UGX 0 to 4,020,000 10%
From UGX 4,020,001 to 4,920,000 UGX 402,000 + 20%
From UGX 4,920,001 to 120,000,000 UGX 582,000 + 30%
Above UGX 120,000,000 UGX 35,106,000 + 40%
Rental income 20% of the income in excess of UGX 2,820,000 (with a 20% deduction allowed)
Allowable Deductions and Tax Credits

The first UGX 2,820,000 of a resident individual's annual income falls in the nil tax bands and is not subject to taxation. An individual is allowed by the law to make the following deductions from the gross income: all the expenditures and losses that were incurred by a person during the year of income, if incurred in the production of the income; any loss incurred by the individual on the disposal of a business asset during the year; donations made to amateur sporting associations, religious institutions, charitable institutions, or educational institutions of a public character, up to 5% of the chargeable income.
In cases where the individual receives rental income, an amount equal to 20% of the rental income is allowed as expenditure and losses incurred in the production of that income, with the balance being taxed at 20%.

Special Expatriate Tax Regime
A resident person is taxed on his/her worldwide income. Non-resident individuals are liable to tax only on Uganda-source income or income from employment exercised or services rendered in Uganda.
An individual present in Uganda for at least 183 days in any 12-month period is resident for the tax years beginning and ending in that period. In addition, a person who has been present for an average of at least 122 days during three consecutive tax years, or with a permanent home in Uganda, is considered a tax resident.
Non-residents cannot enjoy the tax allowance of UGX 2,820,000 available for residents.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Consult the list of Tax Conventions signed by Uganda
Withholding Taxes
Dividends; 15%; Interests: 15%; Royalties: 15%

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Find out more about Taxes and Accounting in Uganda on GlobalTrade.net, the Directory for International Trade Service Providers.

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Latest Update: April 2022

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