Business Income

17:04:36The income tax rate for individuals depends on the income bracket in which the individual falls. Resident individuals enjoy a tax-free annual income threshold of UGX. 2,820,000 per annum.

The balance is taxed at 10%, 20% or 30% depending on the income bracket. Individuals who earn above UGX 120,000,000 per annum pay an additional 10% on the income above UGX 120 million.

(Visited 1,439 times, 1 visits today)

The basis for determination of the Income tax liability for an individual is the gross income generated reduced by allowable deductions and any income tax paid or withheld at source on the gross Income for that year.

ANNUAL CHARGEABLE INCOME (CY) IN UGX	RATE OF TAX RESIDENTS
0 to 2,820,000	Nil
2,820,000 to 4,020,000	(CY – 2,820,000UGX) x 10%
4,020,000 to 4,920,000	(CY – 4,020,000UGX) x 20% + 120,000UGX
4,920,000 to 120,000,000	(CY – 4,920,000UGX) x 30% + 300,000UGX
Above 120,000,000	[(CY – 4,920,000UGX) x 30% + 582,000UGX] +[(CY – 120,000,000UGX) x 10%]

ANNUAL CHARGEABLE INCOME (CY) IN UGX	RATE OF TAX NON-RESIDENTS
0 to 4,020,000	CY x 10%
4,020,000 to 4,920,000	(CY – 4,020,000UGX) x 20% + 402,000UGX
4,920,000 to 120,000,000	(CY – 4,920,000UGX) x 30% + 582,000UGX
Above 120,000,000	[(CY – 4,920,000UGX) x 30% + 582,000UGX] +[(CY – 120,000,000UGX) x 10%]

This is imposed on all corporate entities (Companies) engaging in business activities.

Income Tax is charged at a rate of 30% of the entity’s chargeable income (gross income less allowable deductions).

Sale of goods (clothes, shoes, Poultry, Timber, beans)	200,000,000
Add Other income
(eg subletting of space for rent)	39,000,000
Total revenue from trading		239,000,000
Less: Costs of goods sold
Purchases	15,000,000
Direct labor- (sales girl, planting, weeding, feeds)	14,000,000
Cost of direct overheads (direct power, water, etc.)	5,000,000
Total Production Costs		34,000,000
Other costs:
Less Administrative costs
(Worker salaries, office power, Water, rent, etc.)	16,000,000
Total costs		50,000,000
Net Profit/Loss (Chargeable Income)	189,000,000
Tax at 30%	56,700,000

How do you find this resource?

Add to Bookmarks (0)

Click here to login

Business Income

What is the basis of Business Income

What is chargeable income

What is a non-individual Business income tax (Corporation Tax)?

Determination of the Tax liability for companies (Non- individuals)

Please login to bookmark