Source: https://rivet.global/blog/uganda-companies-paying-foreign-services-withholding-vat
Published: 2026-10-30 · Updated: 2026-10-30 · By William Sunjo M.

# Ugandan companies paying foreign service providers: withholding tax and VAT on imported services

Ugandan companies paying non-resident providers often withhold 15 percent and account for VAT on imported services. How both rules work.

## Key takeaways

- Uganda withholds tax, generally at 15 percent, on many payments to non-residents, including management and professional fees and royalties from Ugandan sources.
- Ugandan companies account for VAT on imported services under the reverse charge.
- Tax treaties and the East African Community framework can affect rates; Uganda has a limited treaty network.
- Withholding and VAT on imported services are generally due by the 15th of the following month.

A Kampala telecom services company pays a Nairobi consultancy UGX 74 million for a network study. Its accountant withholds 15 percent on the fee as a payment to a non-resident, unless a treaty changes it, and accounts for VAT on the imported service under the reverse charge. Both go to the Uganda Revenue Authority by the 15th of next month.

## Withholding on non-residents

Uganda's Income Tax Act requires withholding, generally at 15 percent, on many payments from Ugandan sources to non-residents, including:

- management and professional fees,
- royalties,
- dividends and interest.

The payer withholds and remits the tax. Failure makes the payer liable.

## VAT on imported services

When a Ugandan company receives services from a non-resident, it generally accounts for VAT on the imported service under the reverse charge. Registered companies can usually recover it as input tax if they use the service for taxable supplies.

## Treaties

Uganda has a limited network of tax treaties, including some regional ones. Where a treaty applies, the rate may fall. Keep the provider's certificate of tax residence.

## Deadlines

Withholding and VAT on imported services are generally due by the 15th of the month after payment.

## Gross or net

Foreign providers often quote net. If you gross up, the 15 percent is on top. Agree it in the contract.

## Where Rivet fits

Rivet does not file Ugandan taxes. A Rivet business account accepts registered companies after verification, including Ugandan companies, and pays providers in 120+ countries with each payment matched to its invoice. Rivet is not a bank; regulated partner institutions hold the funds.

## Questions

### What is the withholding rate on payments to non-residents in Uganda?

Generally 15 percent on payments such as management and professional fees, royalties and dividends from Ugandan sources, subject to treaties.

### What is VAT on imported services?

A reverse charge where the Ugandan recipient accounts for VAT on services supplied by a non-resident.

### When are these due?

Generally by the 15th day of the month following payment.

### Do treaties reduce the rate?

Uganda has treaties with some countries that can reduce withholding. Check the relevant treaty and keep the provider's residence certificate.