Uganda

Individual - Income determination

Last reviewed - 13 December 2019

The gross income of an individual for a year of income is the total amount of one’s employment income, business income, and property income.

Employment income

An individual's employment income is any income derived from employment and includes wages, salaries, leave pay, payment in lieu of leave, overtime pay, fees, commission, gratuity, and bonus or any other allowance received. It also includes the value of any benefit granted during employment and any payments on the termination of employment.

Business income

An individual’s business income is any income derived by a person in carrying out a business and includes the following amounts:

  • Proceeds derived from business operations, such as disposal of business stock and similar amounts from trading.
  • Capital gains on the disposal of business assets or cancellation of business debts.
  • Rental income from a business of letting properties.
  • Interest from any business of money lending.
  • Gifts derived by a person in the course of past, present, or prospective business relationships.

Property income

Income from properties includes any interest, annuity, dividends, rents, natural resource payments, and similar amounts received by the individual. Tax is charged separately for rental income. See the Taxes on personal income section for a description of associated WHT and rental tax.

Exempt income

Certain amounts of income are exempt from tax, such as:

  • Foreign source income of a short-term resident of Uganda.
  • Any capital gain that is not included in business income, except a gain derived from sale of shares in a private limited company.
  • The value of property acquired by gift, bequest, devise, or inheritance.
  • Pensions.
  • Proceeds from a life insurance policy paid by a person carrying out a life insurance business.
  • Official employment income of persons in the armed forces, police, and prisons forces.