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Uganda

Taxes

If you want to do business in Uganda, this article explains the tax laws for a LLC which is the most common legal entity in Uganda.

Uganda taxes corporate income on a worldwide basis. The prevailing approximate tax rate for offshore income, from our research, and your results may vary, is 30%. Uganda doesn't have major incentives to remit income accrued abroad. Standard rate of taxation on a LLC entity is 30%. This ranks Uganda as 139th when compared to CIT globally.

The value added tax (VAT) rate is 18%, which ranks Uganda as 120th when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 10% to the equivalent of a social security fund and an employee will contribute 5%. The overall complexity of the tax system is medium.

Thin capitalisation standards are in effect. Thin capitalisation refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received are usually included in corporate income tax base. An exemption may apply if the recipient holds more than 25% of the voting power of the subsidiary. Dividends are a distribution of a portion of a company earnings, voted by the board of directors, to a particular class of shareholders. Dividends can be either cash payments, shares of stock, or other property. Capital Gains are usually subject to Corporate Income Tax. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 15%. This means that the relevant tax authorities expects relevant legal entities to automatically withhold 15% of interest payments to non-residents. The dividends withholding tax rate is 15%. Which means that the tax authorities expects legal entities to withhold 15% of payments abroad on dividends. The royalties withholding tax rate is 15%. Which means that the taxman expects companies to withhold 15% of payments on royalties to non-residents.
There is no tax on wealth in Uganda. There are real property taxes and stamp duties on transfers. There are no known inheritance taxes. We are aware of widely used R&D initiatives that provide tax relief in this country.

The above is not tax or legal advice for your company's circumstances. We are able to help you to find a lawyer in Uganda who can properly advise you. Want to work together? Click incorporate now if you are in a hurry, or press the free consultation button above.

Country details

Uganda
UGX
Kampala
Africa
en-UG, lg, sw, ar
33,398,682

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