Tax is payable on all chargeable income as defined by the Income Tax Act. Exemptions are granted in case of religious, charitable or educational institutions of a public character, and other qualifying bodies.
Tax is payable if the income accrued in or was derived from sources in Uganda. Resident companies or individuals are taxed on their worldwide income. Where a resident company carries on its business partly within and partly outside Uganda, the worldwide profits of that business are deemed to arise in Uganda and constitute income subject to Uganda tax.
A company is considered to be resident in Uganda for a particular year of income if it is incorporated under the laws of Uganda, or its management and control is exercised in Uganda at any time during the year of income, or it undertakes the majority of its operations in Uganda during the year of income.
A non-resident company is liable to Ugandan tax only on income arising in Uganda. If the company has a branch or other permanent establishment in Uganda, all its Ugandan source income, whether or not derived directly through the permanent establishment, is subject to Uganda corporate income tax.
Ugandan withholding taxes deducted at source from chargeable income are creditable against the company’s corporate income tax liability. If the company has no permanent establishment in Uganda, final (definitive) withholding taxes deducted from its Ugandan source income normally discharge its tax liability.
Chargeable income of a company for a year of income is the gross income of that company for the year less total deductions allowed under the Act for the year.