Uganda corporate tax - guide for international expansion

Are you planning to do business in Uganda? Then it's essential to understand how corporate income tax works and what it means for your company operating in this East African nation.

In this guide, we'll break down everything you need to know about corporate taxes in Uganda, from understanding tax rates to ensuring compliance with Uganda Revenue Authority requirements. Whether you're launching a new venture or expanding your business to Uganda, understanding your tax obligations is crucial for successful operations. And if you're looking for efficient ways to manage international payments and reduce transaction costs, we'll also show you how Wise Business can help streamline your cross-border financial operations.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Uganda Corporate tax rate in 2025

The standard corporate income tax rate in Uganda is 30% for all companies, both resident and non-resident. This rate has remained consistent and applies to the chargeable income of companies after allowable deductions under the Income Tax Act.¹

Uganda operates a simplified tax system for smaller businesses. Resident companies with annual turnover between UGX 50 million and UGX 150 million are subject to presumptive tax rather than the standard 30% rate. This system uses a mix of fixed amounts and rates based on turnover, designed to ease compliance for small and medium enterprises.¹

A resident company is defined as one that is incorporated in Uganda or has its place of effective management in Uganda during the year of income. Non-resident companies are only subject to Uganda income tax on income derived from sources within Uganda, typically collected through withholding tax mechanisms.²

Uganda also offers various tax incentives for specific sectors. Manufacturing companies may qualify for reduced rates, and export-oriented businesses can benefit from exemptions under certain conditions. Additionally, the 2024 amendments introduced new exemptions for private equity funds, government securities trading, and specialized sectors like electric vehicle manufacturing.^{3 4}

How to pay corporate tax in Uganda

Corporate tax payments in Uganda are administered by the Uganda Revenue Authority (URA), the country's sole tax collection and administration authority. All registered companies must comply with URA's filing and payment requirements through their designated systems.⁵

Payment Timeline and Deadlines

Companies in Uganda must file their corporate tax returns and pay any outstanding tax within six months after the end of their accounting period. This deadline applies to both resident and non-resident companies with Uganda-source income.⁶

Advance Tax Requirements

Uganda operates an advance tax system where companies may be required to make payments based on estimated tax liability throughout the year, helping to spread the tax burden and improve cash flow management.⁶

Penalties and Interest

Late payment of corporate tax attracts significant penalties and interest charges. A company that fails to pay tax due by the deadline is subject to interest on late payment of tax at a rate of 2% (per month) on the unpaid amount. Importantly, the total interest chargeable is capped at the aggregate of the principal tax and penal tax. The URA also imposes various penalties for other forms of non-compliance, including late filing of tax returns.⁶

Tax Calculation Example

Let's consider a company with an annual turnover of UGX 5 billion (approximately £1.5 million) and operating with a profit margin of 10%, giving it a taxable profit of UGX 500 million.

At Uganda's standard corporate tax rate of 30%, the tax owed would be:

UGX 500,000,000 × 30% = UGX 150,000,000 (approximately £45,000)

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Tax Compliance in Uganda

The practical steps to keep your company fully compliant with Uganda’s tax regulations:^{7 8}

• Register for taxes early: All companies must register with the Uganda Revenue Authority (URA) for a Tax Identification Number (TIN). Timely registration prevents penalties and allows businesses to make a structured corporate tax payment plan covering obligations such as Income Tax, PAYE, and VAT.
• Understand payroll and statutory requirements: Companies must register with the National Social Security Fund (NSSF) upon incorporation and declare beneficial ownership. Employers are responsible for submitting PAYE and NSSF contributions by the 15th of each month.
  Other obligations include 15% VAT, declared through the Electronic Fiscal Receipting and Invoicing System (EFRIS), and Withholding Tax. Corporate Income Tax is charged at 30% for resident companies, and annual returns are due by 31 December following the tax year ending on 30 June.
• Follow transfer pricing rules: Uganda’s transfer pricing regulations, aligned with OECD guidelines, require transactions between related entities to meet the arm’s length principle. Businesses should work with a reliable corporate tax planner to ensure compliance and avoid adjustments from the URA.

By setting up clear systems and meeting filing deadlines, companies can operate confidently in Uganda while avoiding penalties and disruptions.

International Expansion to Uganda

Uganda has become one of East Africa’s fastest-growing economies. The country’s market economy, favourable climate, rich natural resources, and young English-speaking population create a solid foundation for growth. Development of oil fields containing at least 1.4 billion barrels of recoverable reserves continues to attract large-scale foreign investments, making Uganda a hub of opportunity.⁹

Economic indicators highlight this momentum. In FY 2022/23, Uganda’s economy expanded by 5.2%, improving on the 4.6% growth of the previous year. According to the Bank of Uganda, Foreign Direct Investment (FDI) surged by 79.2% in 2023, reaching $2.9 billion compared to $1.4 billion in 2022. Roughly three-quarters of these inflows are linked to oil-related projects estimated at around $10 billion by 2025.¹⁰ Uganda now holds one of the largest FDI stocks in the region, totalling $19.51 billion, representing 37.7% of GDP.¹¹

Investor confidence has been further boosted by recent corporate tax news. The Financial Action Task Force removed Uganda from its “Grey List” in February 2024, while the IMF approved an additional $120 million credit facility the following month.^{10 12} Investors also benefit from business-friendly policies, such as 100% foreign ownership, corporate tax credits, and sector-specific incentives, including a 10-year income tax holiday on qualifying investments above USD 50 million.¹¹ These policies enhance Uganda’s competitiveness among countries with low corporate tax structures.

Another advantage is geography. Located in the heart of East Africa, Uganda shares borders with Kenya, Tanzania, Rwanda, South Sudan, and the Democratic Republic of Congo. This gives companies an entry point to a fast-growing regional market. Combined with a cost of living almost 1.6 times below the world average, the country provides a sustainable base for expansion.¹³

Below are the guidelines on how to start a business here:¹⁴

1. Market research: Understand the Ugandan business environment and target audience.
2. A business plan should be tailored to the local market and growth opportunities.
3. Business name and postal address: Reserve a name through the Uganda Registration Services Bureau (URSB) and secure a verified mailing address through Posta Uganda.
4. Register your company with the URSB to operate legally.
5. Obtain a Tax Identification Number (TIN) from the Uganda Revenue Authority, a key requirement for corporate tax payment.
6. Open a local bank account to manage transactions and establish financial credibility.

These steps ensure compliance with local regulations and streamline corporate tax payment. They also position businesses to benefit from Uganda’s relatively low cost of living compared to the global average.

Incorporation of Business in Uganda

To incorporate a business in Uganda, companies must use the Uganda Registration Services Bureau (URSB) online portal, which streamlines the entire registration process. After logging into the URSB eServices platform, the process begins by selecting “Start” from the main menu, followed by “Incorporate Company.” You’ll need a reserved company name, which you can confirm by selecting it from a pop-up window before proceeding.¹⁵

The incorporation process includes the submission of key forms:¹⁵

• Form S18: captures the company’s physical and postal address, proposed share capital, and details of initial shareholders.
• Form A1: records the number and classification of shares and their nominal value.
• Memorandum and Articles of Association (Mem Arts): outline the company’s objectives, powers, and governance structure.
• Form 20: records particulars of directors, including nationality, occupation, and identification details.
• Official company contact details: email, phone, and postal address for regulatory communication.

Other documents include passport photos, national IDs, proof of address, and Tax Identification Number (TIN) confirmations. When all forms are completed and uploaded, applicants preview their details, sign the forms, and make payment before submission.

This process ensures compliance with Uganda’s corporate tax policies and makes it easier for businesses to engage corporate tax accountants or solicitors for ongoing compliance later.

Business Entities in Uganda

According to the Companies Act 2012, businesses can be established under several entity types:¹⁶

• Limited Liability Company (LLC): This structure requires at least two directors and one shareholder and has no minimum paid-up capital. It is the most common structure suited for private and commercial companies. While a company secretary is mandatory, no specific qualifications are required for private LLCs.
• Public Limited Company (PLC): Requires a minimum of two directors and five shareholders. Shareholders may offer shares to the public, and company secretaries must meet specific qualifications.
• Branch Office: Foreign companies may operate in Uganda as a registered branch without creating a new subsidiary. This allows trading rights under the existing international entity.

Engaging a corporate tax law firm or accountants at this stage can help ensure compliance with corporate governance standards and smooth navigation of tax obligations.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires strategic planning and adherence to international standards. Here are key practices for businesses operating internationally, including in Uganda.

Stay compliant with local and international tax laws

Ensure full registration and compliance with Uganda Revenue Authority requirements, including proper tax registration and maintaining accurate accounting records. Companies must stay updated with Uganda's evolving tax legislation and international tax developments that may affect their operations.

Leverage double taxation treaties

Uganda has double taxation agreements with nine countries: Denmark, India, Italy, Mauritius, the Netherlands, Norway, South Africa, the UK, and Zambia. These treaties help eliminate double taxation and can significantly reduce withholding taxes on cross-border payments, providing important tax planning opportunities for international businesses.

Maintain transparent and accurate financial records

Proper documentation and record-keeping are essential for tax compliance in Uganda. Companies must maintain detailed financial records that support their tax positions and facilitate smooth interactions with tax authorities during audits or reviews.

Consider transfer pricing and international tax planning

For multinational companies, understanding Uganda's tax rules on related-party transactions and international arrangements is crucial for optimizing tax efficiency while maintaining full compliance with local requirements.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Uganda efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Uganda

Who is liable for corporate tax in Uganda?

A resident company is taxed on its income from all geographical sources, while a non-resident company is only subject to Uganda income tax on income derived from sources in Uganda. The income tax rate applicable to companies is 30%, with exceptions for resident companies whose turnover does not exceed UGX 150 million, which are subject to presumptive tax instead.

Are there any tax incentives for businesses in Uganda?

Yes, Uganda offers several tax incentives to promote investment. These include exemptions for exporters of finished consumer and capital goods (10-year income tax exemption for qualifying investments), exemptions for private equity and venture capital funds, and special provisions for operators in industrial parks engaged in electric vehicle manufacturing or specialized hospital facilities. Additionally, a new 3-year income tax exemption for start-ups established by Ugandan citizens was introduced, effective July 2025.

What is the tax treatment of dividends in Uganda?

The Income Tax Act imposes a withholding tax of 15% on all payments made to non-resident persons who derive dividends from sources in Uganda. For resident companies, dividend distributions are subject to withholding tax at the time of payment, with the company required to withhold tax at 15% of the gross amount of the dividend paid.

What is the process for registering for corporate tax in Uganda?

Every individual or entity liable to pay tax is obliged to apply to the Uganda Revenue Authority for registration. Once the registration process is concluded, a certificate of registration is issued. Foreign investors seeking to operate in Uganda must also complete this registration process with URA to obtain the necessary tax identification and comply with local tax obligations.

What are the common pitfalls to avoid regarding corporate tax in Uganda?

Common mistakes include failing to register with URA properly, not understanding the difference between resident and non-resident tax obligations, incorrectly calculating taxable income, and not taking advantage of available double taxation treaty benefits. Companies should also be aware that Uganda is not a party to the Multilateral Convention to Implement Tax Treaty Related Measures (MLI), so treaty provisions remain unaffected by international MLI changes.

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Sources used in this article:

1. PwC Tax Summaries: Uganda Taxes on Corporate Income
2. PwC Tax Summaries: Uganda Corporate Residence
3. ENSafrica: Key 2024/2025 Tax Amendments for Investors in Uganda
4. Ministry of Finance: Conference on Tax Incentives in Uganda
5. Uganda Revenue Authority (URA) Official Portal
6. PwC Tax Summaries: Uganda Tax Administration
7. Dentons: Global Tax Guide to Doing Business in Uganda
8. Kreston: Doing Business in Uganda
9. U.S. Trade.gov: Uganda Investment Climate Statement (ICS)
10. U.S. Department of State: 2024 Investment Climate Statements - Uganda
11. Mauritius Trade: Investing in Uganda Market Intelligence
12. FATF: Jurisdictions under Increased Monitoring (Including Uganda, Feb 2025)
13. Radix Investor: Why Invest in Uganda
14. Multiplier: Uganda Company Registration
15. Uganda Registration Services Bureau (URSB): Online Business Registration System How-to (PDF)
16. Healy Consultants: Uganda LLC Setup Guide

Sources last checked 24/10/2025