FSD UgandaGuidance Note 1: Taxation of Private Equity Funds in Uganda
The taxation of private-equity (PE) funds in Uganda has evolved significantly in recent years, shaped by targeted reforms that aim to attract investment, modernise capital markets, and plug revenue leakages associated with cross-border financing structures. As Uganda seeks to position itself as a competitive investment destination in East Africa, understanding the tax framework applicable to PE funds, fund managers, and their investors becomes essential.
This Guidance Note provides a comprehensive overview of the taxation environment applicable to private equity (PE) and venture capital (VC) funds and their fund managers operating in Uganda. It is designed to support fund sponsors, investors, fund managers, advisors, and investment professionals in navigating Uganda’s tax framework across the full investment lifecycle from fund establishment and operation to exit. The guide provides an analysis of applicable taxes for PE and VC funds, including income tax at the fund level, taxation of partners or investors, capital gains taxation, withholding tax, value-added tax (VAT), and stamp duty. Particular emphasis is placed on distinguishing between the tax treatment of the fund as a vehicle and its partners. However, recent tax reforms have led to income tax exemptions being available to locally regulated funds and their partners/investors.
