Tax lawyer – Page 2

A CORPORATE GOVERNANCE MASTERCLASS FOR ENTREPRENEURS FROM THE HUMPHREY NZEYI v BoU CASE.

While shareholders own the company, they DO NOT own the assets of the company. The assets they own are the shares allotted to them. The company owns its assets. Conversely, the shareholders are not the managers of the company. They must first become directors in law for them to exercise managerial roles.

The directors(the Managers) owe a fiduciary duty to the company as ‘a whole’. This fiduciary duty requires directors to act in good faith and in the long-term interests of the entity, balancing the interests of both shareholders and creditors.

This is because the total assets of a company are composed of shareholder equity+liabilities (i.e. creditor interests). For the section of my readership without an accounting background, in law this is the starting point of the accounting equation. The company as a legal entity is therefore subject to these two competing legal(or equitable) claims.

The directors’ duty to act in the company’s best interests logically includes the obligation to weigh and balance these interests at all times.

When a company enters financial distress, the law demands that the board begin to prioritize the interests of creditors alongside those of shareholders and certain transactions are outright void at law in extreme circumstances where this principle is breached.

Good Corporate governance and Board composition matters. A competent, diverse board is better equipped to navigate financial stress and generally, the intricate market and regulatory dynamics in which the company operates. Ensure you have a blend of directors with expertise in risk, tax, legal, and operations as opposed to just investors, friends or family members.

AI’s Disruption of Professional Services: The Rise of Niche Expertise.

The market now favors firms and individuals who deeply understand specific domains or sectors rather than generalists trying to do everything. A “niche within a niche” allows consultants to become irreplaceable for a defined audience or challenge set.

AI may also have provided the easy answer to the all important career decision question for senior consultants and executives in larger legacy firms; Which is whether to choose boutique independence over the politics, processes, and layers of bureaucracy that come with being part of a large firm

MRT Tax in Strategic Partnership with The Cragus Group—The GCC’s Leading Tax and Transfer Pricing Advisory Group

MRT Tax is pleased to announce a new strategic collaboration partnership with The Cragus Group, a ITR (World Tax) Top Tier Tax Firm headquartered in the United Arab Emirates (UAE).

Cragus is consistently ranked ahead of the Big 4 in the GCC, and is widely regarded as one of the region’s most trusted tax and transfer pricing firms, with a specialized oil and gas practice.

“This partnership bolsters our advisory capabilities, bringing together deep local insight and international oil and gas tax expertise for upstream, midstream and downstream investments currently being undertaken in East Africa’s oil and gas sector.” Remarked, Mark Ruhindi, the Managing Partner

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;

(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.

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.

DISPOSAL OF REAL ESTATE ASSETS; WHEN DO WITHHOLDING TAX OBLIGATIONS ARISE?

Withholding tax on real estate transactions is advance capital gains tax on the disposal of ”business assets”. And in turn, Capital gains tax is a subcategory of business income under the Income tax Act. And finally if a transaction does not amount to a trading transaction, withholding tax under business income does not arise because the proceeds of the sale are not received as taxable income.