Uganda: Business Environment

Accounting Rules

Tax Year: The normal fiscal year goes from July to June, however a company may adopt a different period with the consent of the commissioner.
Accounting Standards: The corporate accounting, auditing, and financial reporting requirements in Uganda are regulated by the Companies Act of 2012 and the Accountants Act of 2013. The Companies Act of 2012 specifies that all entities are required to prepare financial statements, and it describes disclosure and presentation requirements for the balance sheet and financial statements. Private sector entities and publicly accountable entities are required to apply IFRS in the preparation of their financial statements.
Accounting Regulation Bodies: Institute of Certified Public Accountants of Uganda
Accounting Reports: Every company shall cause to be kept in the English language proper books of account. The directors of a company shall at a date not later than eighteen months after the incorporation of the company and subsequently, once at least in every calendar year, lay before the company in general meeting a profit and loss account. Every balance sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of its financial year and every profit and loss account of a company shall give a true and fair view of the profit or loss of the company for the financial year.
Publication Requirements: The Capital Markets Authority Act and Uganda Securities Exchange Listing Rules require listed entities to file audited annual financial statements to the Uganda Securities Exchange within 4 months after the end of each financial year and at least 21 days before the date of the annual general meeting.
The Companies Act of 2012 requires public companies to file audited annual financial statements with the Registrar of Companies within 42 days after the annual general meeting, while the Financial Institutions Act requires financial institutions to submit to the Central Bank of Uganda audited annual financial statements approved by their Board of Directors within 3 months after the end of its financial year.
Professional Accountancy Bodies: Institute of Certified Public Accountants of Uganda
Certification and Auditing: Under the Companies Act 2012, all entities are required to have their financial statements audited. The Institute of Certified Public Accountants of Uganda (ICPAU) mandates the use of ISA for the performance of all financial statement audits, which must be conducted by ICPAU members.
Accounting News

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 property; education 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; the supply of accommodation in tourist hotels and lodges located upcountry; the supply of processed milk; the supply of locally developed computer software, its maintenance and software license; 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; the supply of liquefied gas and denatured fuel ethanol from cassava; 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.

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 (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.

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.

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	30% (a deduction of interest on the mortgage obtained to construct or acquire the premises that generate the income is allowed, plus a subtraction of expenses and losses, capped at 75% of gross rental income)

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).

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%
Bilateral Agreement: Uganda and Mauritius concluded a Double Taxation Agreement.

Sources of Fiscal Information

Tax Authorities: Overview of Uganda's tax measures in response to Covid-19
Uganda Revenue Authority
Other Domestic Resources: Ministry of Finance, Planning and Economic Development
Uganda Investment Authority

Intellectual Property

National Organisations: Uganda Registration Service Bureau
Regional Organisations: African Regional Intellectual Property Organization (ARIPO)

Legal Framework

Independence of Justice: The judiciary is an independent legal organ comprised of Courts of Judicature as provided for by the Constitution. Article 126 of the Constitution states that "in the exercise of judicial power, the courts shall be independent and shall not be subject to the control or direction of any person or authority. No person or authority shall interfere with the courts or judicial officers in the exercise of their judicial functions".
Equal Treatment of Nationals and Foreigners: According to the 2018 Investment Climate Statement by the U.S. Department of State, commercial legal process sometimes favour politically connected companies that deploy political pressure and bribery to disrupt and delay outcomes. Some investigative journalistic reports feature anecdotal accounts of judges at the Commercial Court asking for bribes in order to rule favorably.
The Language of Justice: English has been the official language of Uganda since independence in 1962.
Recourse to an Interpreter: It is possible to have access to an interpreter in Uganda.
Sources of the Law and Legal Similarities: Uganda's legal system is based on English common law and African customary law. The main source of the law is the Constitution of 1995.
Checking National Laws Online: Library of the Congress website

Standards

National Standards Organisations: Uganda National Bureau Of Standards
Integration in the International Standards Network: The Uganda National Bureau of Standards (UNBS) is a member of ISO.
Classification of Standards: ISO 3166-2:UG
Online Consultation of Standards: See the list of standards on the UNBS website.
Certification Organisations: Uganda National Bureau Of Standards

Business Practices

General Information
Opening Hours and Days: Office hours are typically 8:00 a.m. to 5:00 p.m. Monday to Friday.
Under the Public Service Standing Orders, the official work hours for public servants are as follows: Monday to Friday, 8:00 a.m. to 12.45 p.m. and 2:00 p.m. to 5 p.m. (with lunch break from 12.45 p.m. to 2:00 p.m.)

Public Holidays

January 1	New Year’s Day
January 26	Liberation Day
April 14	Good Friday
April 17	Easter Monday
May 29	Labor Day
June 3	Martyrs’ Day
June 9	National Hero’s Day
June 26	Eid al-Fitr
September 2	Eid al-Adha
October 9	Independence Day
December 25	Christmas
December 26	Boxing Day

Holiday Compensation: Employees can voluntarily decide to work on public holidays. He or she will will receive twice the normal wage. Statutory holidays are not part of annual leave and should not be deducted from employees' annual leave.

Periods When Companies Usually Close

Christmas time	End of December
Eid al-Adha	According to Lunar calendar

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