Uganda Replaces 5% Digital Services Tax with 15% Withholding Tax on Non-Resident Providers

• Uganda is revising its digital taxation policy with the Tax Amendment Bill, 2025.
• The 5% Digital Services Tax (DST) from 2023 will be replaced by a 15% final withholding tax on non-resident income from digital services in Uganda.
• The DST targeted non-resident digital service providers and faced implementation challenges.
• The new 15% withholding tax applies to digital services for users in Uganda, regardless of provider location.
• Resident payers or financial institutions may be responsible for withholding the tax.
• The 15% tax is final and does not require a permanent establishment in Uganda.
• The new tax regime starts on July 1, 2025.
• The shift aims for administrative efficiency, tax certainty, and international alignment.
• The withholding tax may apply to a broader range of services and increase costs for digital platforms.
• Non-residents must monitor payments from Uganda and may need to adjust pricing or contracts.

Source: vatabout.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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