Category Archives: stamp duty

Uganda’s Tax Exemption for Start-Ups: Key Insights for Entrepreneurs.

This fiscal year’s tax amendments included certain key amendments that have been hailed as a critical step in the right direction for tax administration, and particularly the tax exemptions provisions targeting start-ups and similar fledgling businesses.

​The amendment introduced new tax law aimed at fostering and supporting well formalised entrepreneurship, in the form of an income tax exemption for Uganda Citizen owned businesses started after 1st July 2025, for three-years.

Its practical application however requires a precise understanding of how the Uganda Revenue Authority (URA) interprets “new business,”, “associated entities,” and “Compliance” among other tax nomenclature. Yes, as with all incentives, the opportunity lies in the detail. This article seeks to address this detail.

Investing in Uganda; Tax Planning and Why Tax Should Lead Your Market Entry Strategy

The decision on corporate structure, i.e, whether to register a subsidiary vs. branch, Financing questions, i.e debt vs. equity, tax residence/domicile/location of holding entities are all strategy questions which are informed by tax considerations. 

Choosing the wrong structure can expose the investor to; Transfer pricing risk, Withholding tax inefficiencies, Loss of treaty benefits, Double taxation and generally, tax inefficiency and a higher tax burden across different tax heads.

But what happens when the company is set up in a way that causes preventable tax leakages or unnecessary friction with the tax authorities?

For any foreign investor entering the Ugandan market, undertaking corporate legal structuring advice without any input from a tax practitioner is a grave mistake.

While the structure may be viable on paper, it might ignore certain critical elements of transfer pricing regulation, international tax treaty benefits and domestic tax compliance aspects that might later work against the investor and require a costly restructuring process.

2025 TAX AMENDMENTS; PROPOSED STAMP DUTY AMENDMENTS DO NOT CURE DEFECTS IN THE LAW

The Minister proposes an amendment to Schedule 2 to the Stamp Duty Act, to provide for nil duty for an agreement or memorandum of agreement executed or received in Uganda.

I need to warn at this point that Taxpayers better not celebrate just yet. This is because, the proposed amendment if passed into law might not in fact take away this liability. The Stamp Duty Act as it currently stands is littered with overlapping levies and one of these is the one the Minister proposes to do away with.

The tax sought to be done away with might still be brought home to a taxpayer by enforcing another provision. That other provision happens to be item 52 of Schedule 2 of the Stamp Duty Act, which levies Stamp Duty of a similar amount(Shs. 15000/=) on a RECEIPT as defined by section 2, for any money or other property the amount of value of which exceeds Shs. 50000 /=.

Section 2 of the Act defines the RECEIPT as follows;

“RECEIPT” includes a note, memorandum or writing whether the note, memorandum or writing is or is not signed with the name of a person,

(a) by which any money, or any bill of exchange, cheque or promissory note is acknowledged to have been received;

(b) by which any other movable property is acknowledged to have been received in satisfaction of a debt;

(c) by which a debt or demand, or any part of a debt or demand, is acknowledged to have been satisfied or discharged; or

(d) which signifies or imports the acknowledgment;

The definition of a receipt under that Section is so wide that it in fact includes and indeed refers to what essentially is an agreement and a Memorandum of an agreement.

STAMP DUTY IN ELECTRONIC TRANSACTIONS; DIGITAL ECONOMY TAX RISK TO LOOK OUT FOR

The obligation to pay stamp duty arises every time two parties execute an agreement to create, transfer, extend or extinguish a legal right or a liability.

The transaction is evidenced by an instrument which may be a physical document such as a loan agreement, a sale agreement or a memorandum of acknowledgement of a debt and in the case of e-commerce transactions, by an electronic data message or series of electronic data messages which collectively form the agreement instrument.

Money Lending Regulation: Key Insights for Lenders and Borrowers

Institutions or money lenders are now under a mandatory obligation to allow borrowers at least five working days after signing a lending contract, to revoke or terminate the contract by written notice delivered to the institution or money lender.

The revocation termination is effective if the borrower repays the full amount of the loan at the time of cancellation of the contract and any other administrative charges, or fees which have been reasonably incurred in arranging the loan and these must not exceed two percent of the value of the loan.

STAMP DUTY IN E-COMMERCE CONTRACTS; WHAT YOU NEED TO KNOW.

The obligation to pay stamp duty arises every time two parties execute an agreement to create, transfer, extend or extinguish a legal right or a liability.

Obviously failure or refusal to comply with a tax obligation has nothing to do with the authenticity of a transaction document, at least between the parties to a transaction. The law simply punishes the taxpayer by refusing to permit a party to rely upon the transaction document in a court of law to enforce a bargain until the tax is paid. The transaction document therefore remains authentic and valid, but of no evidential value in court proceedings unless the tax is paid. The bargain may still be enforced by relying upon other species of evidence.

The transaction is evidenced by an instrument which may be a physical document such as a loan agreement, a sale agreement or a memorandum of acknowledgement of a debt and in the case of e-commerce transactions, by an electronic data message or series of electronic data messages which collectively form the agreement instrument.

ELECTRONIC TRANSACTIONS AND STAMP DUTY; TAX RISK FACTORS THAT COULD RESHAPE MOBILE MONEY AND DIGITAL LENDING

The obligation to pay stamp duty arises every time two parties execute an agreement to create, transfer, extend or extinguish a legal right or a liability.

The transaction is evidenced by an instrument which may be a physical document such as a loan agreement, a sale agreement or a memorandum of acknowledgement of a debt and in the case of e-commerce transactions, by an electronic data message or series of electronic data messages which collectively form the agreement instrument.

MARKET GUIDE ON TAXATION OF THE REAL ESTATE SECTOR IN UGANDA

“Real estate transactions of UGX 37,500,000/- AND ABOVE carry a VAT component to them, and so with URA’s current aggressive stand, taxpayer’s may need to treat large real estate transactions as complex commercial transactions for which a lay ordinary trader or party may need not just legal but ought to take transaction tax advice too.”

“URA will be able to identify who is a real estate trader/business, i.e, those involved in the purchase and sale of real estate properties as repetitive/continuing trade/business activities as opposed to one off transactions such as buying a family home.

It is this transaction data gathered by URA over the course of time, which will enable it to conduct audits and raise income tax, withholding tax and VAT assessments on trade activities that may go back 5 years or so, and seek to recover tax that may not have been accounted for and declared by these real estate dealers/businesses.”