Tax rates in Uganda

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 (30%).
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.

Tax Rate

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 75% of the rental income is allowed as expenditure and losses incurred in the production of that income, with the balance being taxed at 30%.

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 (see above for a detail of the tax brackets).