Category Archives: TAX PLANNING

2025 OECD Rules Update on Remote Workers: Tax Insights on Cross-Border Human Capital Management.

The 2025 OECD Model Convention Update on the International Taxation concept of Permanent Establishments(PE) has fundamentally redefined Human Capital and Workforce Management in the context of cross-border remote working. 

These changes, which African nations like Uganda are expected to localise as domestic tax law, widens cross-border tax risk exposure for Multi-National Enterprises(MNEs) beyond commercial presence through physical offices. The news rules recognise the notion of commercial presence through human capital and remote workers working from a home or a similar place in another jurisdiction.

This opinion critically analyses the PE concept and its application to cross-border remote working in the context of Uganda’s current PE law, and further discusses the likely implications of the update from two perspectives:

First, the implications for global and regional firms and technology start-ups scaling across borders, with emphasis on emerging human capital management complications likely to arise once African countries, including Uganda, localise the update into domestic tax law.
Secondly, the opinion discusses the advantages it offers to tax administrations(OECD Member nations and nations that eventually localise the update into domestic law), particularly on combating tax avoidance by multinational enterprises (MNEs).

For the non-technical readers, I will be returning to explain the concept of a PE in simple terms but below are the new changes in brief:

The New Test: A PE is now strongly indicated if an employee works from a home office in State A for 50% of their total working time for their Non-Resident employer in State B AND there is a commercial reason for their presence in state A (e.g, servicing local clients and time-zone alignment). The changes have explicitly rejected cost saving or employee convenience as sole justification for remote cross-border working.
Impact on Tax Administration: The update is a powerful anti-avoidance tool for Tax Authorities, allowing them to assert taxing rights based on functional substance rather than just legal form(e.g work-from-anywhere contract clauses permitting cross-border remote working), materially expanding the tax base beyond the current 183-day Service PE rule.

Headache for MNEs and Tech Start-ups: The new rules transform low-cost, agile market testing for tech start-ups into a high-cost compliance burden for start-ups and other regional businesses trying to enter new markets and to scale across-borders. 

The rules will likely result in immediate, non-negotiable Payroll, Social Security, and Immigration risk above Corporate Income Tax, aggressively eroding the limited cash runway of young scaling companies, and rope companies into a more complex compliance matrix.

Navigating Foreign Income Taxation in Uganda: Key Tax Insights on Offshore Asset holdings

In the last quarter of 2025, a significant number of Ugandans in the diaspora alongside resident High-Networth taxpayers with offshore interests received emails from the Uganda Revenue Authority (URA) conveying a directive that might be signaling the end of “Offshore Anonymity” for Ugandan Taxpayers

In the emails, URA informs taxpayers that it has received information indicating that “you have earned foreign income or gains” and that “Preliminary analysis indicates that one or more foreign financial accounts or assets associated with your name and TIN”

The taxpayer are then given seven days to review and regularize their tax affairs before commencement of a formal investigation.

This is not routine correspondence, but rather one that marks a new phase in Uganda’s tax administration, one defined by unprecedented financial transparency and access to foreign financial information regarding the commercial activities of taxpayers.

The notices confirm that Uganda has fully operationalized the global data-exchange framework built around the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC), following the Uganda Parliament’s enactment of the Convention on Mutual Administrative Assistance in Tax Matters (Implementation) Act, 2023.

Under this framework, Foreign Jurisdictions volunteer taxpayer information on income generating asset holdings, transactions that might have resulted in taxable gains, emoluments subject to tax in Uganda, among other categories of information relevant to tax administration.

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.

RESIDENCY TAX AVOIDANCE: THE STORY OF BRITISH BILLIONAIRE LORD SUGAR AND HIS £186M TAX TAB AFTER A RECENTLY FAILED AVOIDANCE SCHEME. 

Ugandan tax residency rules, just like those of many commonwealth jurisdictions are in many respects similar to those pertaining in the UK. Under Ugandan law, a taxpayer who is a natural person is resident for tax purposes if they have a permanent home in Uganda, or they are present in Uganda for an aggregate of 183 days in the year of income or are present in Uganda for a period averaging 122 days in the year of income and in the two years preceding the year of income or if they are a Government employee posted abroad during the year of income.

Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(1/2).

MARK RUHINDI There are many business owners who have never heard the term ‘tax planning’ and those who have but don’t really understand what it entails in the technical sense. I think I can best explain this taxation concept to lay people reading this by making reference to another equally often under-looked aspect of runningContinueContinue reading “Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(1/2).”

Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(2/2).

MARK RUHINDI Tax planning involves arranging one’s commercial affairs taking into account the taxation legal regime in place, in a manner that ensures that a trader pays the lowest taxes possible. Simply put, tax planning is therefore planning around the taxation legal regime in place for tax efficiency. It aims to reduce one’s tax liability through the utilisation of tax exemptions,ContinueContinue reading “Tax planning, Corporate governance and Uganda’s increasingly complex tax regime(2/2).”