How does withholding tax work in Uganda?
Designated agents withhold 6% on payments over UGX 1 million for goods and services. Dividends, interest and payments to non-residents carry 15%.
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Detailed Explanation
## The rates
- 6%
designated agents on payments over UGX 1 million; resident professional and management fees - **15%**: dividends (10% from a listed company), interest, non-residents (unless a treaty lowers it)
## On the VAT-exclusive amount
On a VAT-inclusive invoice of UGX 26 million, WHT is UGX 1,322,034.
## Deadline
Return and payment by the 15th of the following month.
## For the supplier
WHT suffered is a credit against your income tax. Finn records it as a tax asset.
Source: https://ura.go.ug/storage/2024/12/Withholding-Tax-FY-2024-25-1.pdf
Real-World Examples
Supplier paid by a designated agent
A UGX 2 million invoice is paid UGX 1,880,000 and the 120,000 is a credit.
Common Mistakes to Avoid
- Booking WHT suffered as an expense
- Computing WHT on the VAT-inclusive amount
Frequently Asked Questions
Can I get an exemption?
Yes, apply to URA for a withholding tax exemption.
Practical Tips
- Ask customers for withholding certificates every month
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