THE TAX APPEALS TRIBUNAL CLARIFIES THE TAXCONSEQUENCES OF OWNERSHIP CHANGES INRESTRUCTURING TRANSACTIONS

The Tax Appeals Tribunal recently issued a significant decision in Kuku Foods Uganda Limited v Uganda Revenue Authority, TAT Application No. 54 of 2025, clarifying the application of sections 74(2) and 78(h) of the Income Tax Act Cap 338 in transactions involving corporate restructuring and ownership changes. The decision is particularly relevant for companies undergoing structural changes because it confirms that a significant change in ownership can create a tax liability for the company itself, even where the company has not sold any assets or received any money from the transaction. The Tribunal’s ruling provides important guidance on the distinction between taxation of share transfers and taxation arising from deemed realization of assets and liabilities following a qualifying ownership change.