Business Advisory

Frequently asked questions

What types of business income are taxable in Uganda?

In Uganda, various types of business income are taxable, including profits from trade, profession, vocation, or any adventure in the nature of trade. This covers a wide range of activities, from selling goods to providing professional services.

How do I know if my business income is subject to taxation?

Your business income is generally subject to taxation if it is derived from any trade, profession, vocation, or adventure in the nature of trade. It's important to consult with me to understand your specific tax obligations.

What expenses can I deduct from my business income for tax purposes?

You can deduct expenses that are incurred wholly and exclusively for the purpose of generating income for your business. This includes expenses such as rent, salaries, utilities, and other operational costs. Keep detailed records to support your deductions..

Are capital gains taxable in Uganda?

Yes, capital gains derived from the disposal of business assets are taxable in Uganda. This includes gains from the sale of land, buildings, and other assets used in your business. The tax treatment of capital gains depends on various factors, so it's advisable to seek my professional advice.

What is Value Added Tax (VAT) and do I need to register for it?

VAT is a tax imposed on the supply of taxable goods and services. If your business turnover exceeds a certain threshold, currently set at 150 million Ugandan Shillings per annum, you are required to register for VAT with the URA.

Are there any exemptions for certain types of income in Uganda?

Yes, certain types of income are exempt from taxation in Uganda. These include income from agriculture, scholarships, and certain dividends. However, it's essential to review the specific exemptions outlined in the Income Tax Act or consult with me.

Can I carry forward losses incurred in my business for tax purposes?

Yes, you can carry forward business losses incurred in one tax year to offset against future profits. This can help reduce your tax liability in subsequent years. However, there are rules and limitations regarding the treatment of losses, so it's best to seek my advice.

Is there any tax relief available for new businesses in Uganda?

Yes, Uganda offers various tax incentives and relief measures to support new businesses and promote investment. These may include tax holidays, reduced tax rates, and allowances for capital expenditure. Eligibility criteria and conditions apply, so it's advisable to explore available incentives or consult with me.

How does the withholding tax system work in Uganda?

Withholding tax is deducted at the source of payment by the payer and remitted to the URA. It applies to various types of income, including interest, royalties, and payments to non-resident contractors. The rates and obligations vary depending on the nature of the transaction and the parties involved.

Are there any tax treaties between Uganda and other countries?

Yes, Uganda has tax treaties with several countries to prevent double taxation and promote cross-border trade and investment. These treaties establish the tax treatment of income earned by residents of one country in another country. It's essential to consider the provisions of relevant tax treaties when conducting international business activities.

Can I claim depreciation expenses for assets used in my business?

Yes, you can claim depreciation expenses for assets used in your business to reflect their gradual wear and tear or obsolescence over time. Depreciation is typically calculated based on the asset's cost, useful life, and depreciation method chosen. It's important to maintain accurate records and comply Uganda Reveunue Authority regulations when claiming depreciation.

What are the general registration requirements for businesses in Uganda?

Business registration requirements in Uganda vary based on factors such as the type of business entity and the residential status of directors and individuals. For instance, the requirements for citizens differ from those holding work visas. It's advisable to consult a tax professional like me to understand the minimum requirements needed before registering with The Uganda Revenue Authority.

How can I ensure compliance with tax regulations while running my business?

To ensure compliance with Uganda Revenue Authority, it's essential to keep accurate records, understand your tax obligations, seek professional advice when needed, and stay updated on changes to tax laws. Maintaining transparency and honesty in your tax affairs is key to avoiding potential issues and penalties.