There are no specific provisions in the law covering groups, so companies in a group do not get any special treatment for tax purposes in Uganda.
The transfer pricing regulations apply to controlled transactions if a person who is a party to the transactions is located in and is subject to tax in Uganda and the other person who is a party to the transaction is located in or outside Uganda.
The URA Practice Note issued on 14 May 2012 gives details on the transfer pricing documentation to be maintained by the taxpayer. These include company details and transaction details, including agreements and the pricing methodology used in determining the arm's-length price.
In addition, the anti-avoidance provisions contained in Sections 90 and 91 of the ITA require transactions between associates to be at an arm’s-length. These are the provisions that are often applied by the URA in instances where they are of the view that a non-resident person may be transferring profits from Uganda.
The Commissioner may also make adjustments to transactions between persons who are in an employment relationship although the Transfer Pricing Regulations do not apply to transactions between employers and employees.
A penal tax of UGX 50 million is due on the taxpayer for failure to provide records requested by the Commissioner in respect of transfer pricing.
Uganda no longer has thin capitalisation rules. Interest deductibility is limited based on tax EBITDA.
Controlled foreign companies (CFCs)
Uganda does not have a CFC regime.