Tag Archives: DOING BUSINESS IN UGANDA

Uganda’s Digital Services Tax Landscape in 2026 vs Pillar Two, Global Minimum Tax and the OECD’s Side-by-Side Package.

The international tax landscape continues to transform rapidly in response to the twin pressures of digitalisation and profit shifting by multinational enterprises (MNEs). Many low- and middle-income countries, including Uganda, have adopted unilateral Digital Services Taxes (DSTs) as an interim measure to ensure that digitalised businesses with minimal physical presence nonetheless contribute tax where economic value is created.

These unilateral measures emerged against the backdrop of stalled consensus on a coordinated global response to the taxation of digital activities under the Organisation for Economic Co-operation and Development (OECD) and G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS), Pillar Two.

However, as we enter 2026, the international tax policy environment has shifted again, notably with the recent agreement by over 145 jurisdictions on a revised global minimum tax package aimed at preserving taxing rights of jurisdictions where these MNEs operate through digitalised business models that require little or no physical presence. 

This agreement does not abandon Pillar Two; rather, it modifies its application through a “side-by-side” framework that allows certain jurisdictions, most notably the United States to operate parallel domestic minimum tax regimes while still achieving the policy objective of a 15 % global minimum tax.

This article explains where DST sits in this evolving framework, clarifies key positions from earlier DST debates, and assesses the implications of the side-by-side global minimum tax agreement for both DST regimes and broader international tax cooperation.

Resumption of Services and Tax Risk Outlook for 2026

As we enter the year ahead, we remain firmly aligned with your business objectives, to continue to deliver unrivaled technical acumen in managing each and every one of your mandates across tax and business law, and with the same value proposition of Integrated Tax and legal Excellence, through our two integrated professional services arms.

MRT Tax 2025 Year in Review: The Market and Key Tax Trends

As we draw the curtains on 2025, we reflect on a year defined by transformative shifts in the tax landscape, from local, regional and international standpoints.

2025 has also been a defining one for our firm across advisory, tax controversy, transactions practices, and we are grateful to our clients for the confidence placed in us through the sensitive and high‑stakes mandates we received, as you sought our guidance to help you navigate tax complexity with confidence.

We extend an equal amount of gratitude to our peers and collaborators–locally, regionally, and internationally.

A Year of Excellence, Collaboration, and Global Recognition

Our journey this year has been marked by significant milestones that reinforce MRT Tax’s position as a leading tax firm in Uganda.

Recognition and Rankings:

MRT Tax received nomination for the prestigious Tax Firm of the Year Award – Uganda at the ITR EMEA Tax Awards 2025 and was subsequently recognised in the ITR World Tax 2026 rankings as a Notable leading tax practice in Uganda.

The Founding Managing Partner, Mark Ruhindi received Individual Recognition as a Highly Regarded Practitioner-General Corporate Tax.

Strategic Alliances:

We entered into strategic collaborations with The Cragus Group, one of the GCC’s leading independent tax and transfer pricing firms, and Tax Consulting South Africa (TCSA), a market leader in taxation in South Africa.

These relationships significantly enhanced our ability to advise our clients in international trade on cross‑border structuring, transfer pricing, and international tax risk that crosses into those key trade and investment corridors and vice-versa.

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.

KRA Vs Sendy: Kenya’s High Court VAT Precedent Threatens East Africa’s Gig Economy and Digital Commerce Growth.

Kenya’s High Court has recently delivered a Key decision in the battle over VAT in the ride-hailing/digital platform economy, that risks far-reaching ripple effects across East Africa’s digital commerce landscape. 

The landmark decision fundamentally reclassifies digital platforms as primary suppliers of gig-economy services for VAT purposes. This brings them fully into the VAT net and forces gig workers/entrepreneurs and small merchants into VAT compliance, with potentially far-reaching consequences for the growth, structure, and taxation of the East African digital economy.

The immediate tax implication is that we now have two VATable transactions in every ride or delivery processed through a digital platform operating a similar business model. These are;

Supply from motor vehicle owner to tech platform (input VAT for the platform)

Supply from tech platform to end consumer (output VAT to the tax authorities on full final consideration paid by the end consumer)

This new reality is problematic from a commercial point of view, taking into consideration the nature and level of tax sophistication of most African economies.

The other immediate implication is that thousands of gig-economy participants have been hit with a VAT compliance shock overnight, and the reason is simple; e-commerce platforms lose input VAT if they trade with non-compliant taxpayers. Exposure to commercial activities of too many Non-VAT Traders or informal taxpayers makes the platform’s business model commercially unviable and wipes out margins.

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.

ITR World Tax 2026 Rankings: MRT Tax among Top Tax Firms in Uganda.

We are delighted to share that MRT Tax has been ranked among the Top tax firms in Uganda in the newly released ITR World Tax 2026 rankings

In addition, the firm’s Managing Partner, Mark Ruhindi, has been individually recognized as a ‘Highly Regarded’ practitioner in General Corporate Tax – (The Highest Tax Leader Rating), underscoring his standing as one of Uganda and East Africa’s leading tax professionals.

This achievement follows MRT Tax’s earlier nomination for the “Tax Firm of the Year (Uganda)” Award at the International Tax Review (ITR) EMEA Tax Awards 2025—a ceremony that celebrates the most distinguished tax and transfer pricing professionals and teams across 33 jurisdictions in Europe, the Middle East, and Africa.

These milestones hold particular significance for us, being the youngest practice to attain recognition within this elite category — in a competitive market historically dominated by global accounting networks and long-standing decades old law firms.

MRT Tax in Strategic Partnership with Tax Consulting South Africa (TCSA)—A Leading Independent South Africa Tax Firm

MRT Tax is pleased to announce a strategic collaboration partnership with Tax Consulting South Africa (TCSA), one of South Africa’s foremost independent tax firms.

TCSA has established itself as the go-to firm for sophisticated, high-stakes tax advisory across the Southern African market, offering an unmatched combination of technical depth, innovation, and regulatory insight. With a multi-disciplinary team of tax attorneys and chartered accountants, TCSA consistently sets the standard for independent tax excellence in South Africa — and increasingly, across the continent through a professional services partner network presided over by the firm’s leaders.

As regional trade and investment flows between East and Southern Africa continue to accelerate, our clients increasingly require seamless, multi-jurisdictional tax support. Through this partnership, MRT Tax brings deep East African market knowledge and advisory experience in corporate and transaction tax, while TCSA contributes its leading capabilities in South African and cross-border tax compliance, expatriate taxation, and international tax structuring.

“This partnership enhances our ability to deliver coordinated, high-quality advisory across key African jurisdictions. It’s about ensuring that our clients, wherever they operate on the continent, have access to trusted, technically sound, and independent tax advice,” remarked Mark Ruhindi, Managing Partner MRT Tax.

East Africa Trade: Uganda’s Tax Appeals Tribunal clarifies on EAC Intra-Trade VAT

The Tax Appeals Tribunal has delivered a landmark decision that strikes at the heart of URA’s aggressive enforcement and over-reach tendencies and restores the much-needed balance in the taxpayer-taxman relationship.

(TRADE WORTH ESTABLISHMENTS LTD V URA TAT APPLICATION 338 OF 2024)

In perhaps the strongest language yet from the Tribunal against the revenue body, TAT observed:

“On the whole, we find that the Respondent acted not only unlawfully but also with impunity and in total abuse of their powers and authority… Rather than doing this [refund VAT unlawfully collected], the Respondent orchestrated a phoney scheme to deny the Applicant their refund – a taxpayer, who is the very reason for the Respondent’s existence.”

Citing its earlier decision in Canaan Sites Limited v URA, TAT further emphasises the ethical and legal obligation of URA to return taxes not legally due: “Where the Respondent collects taxes that are not legally owed, it is generally expected to refund those amounts to the taxpayer… it has an ethical and legal obligation to return those funds to maintain trust in the tax system.”