Tax on Selling Trees in Uganda

Do I pay tax when I sell trees?

Possibly, but this page cannot give you a definite answer, and we say so plainly. We searched Uganda Revenue Authority (URA) material for a rule written for tree or timber sales and found none. What URA does publish is general, and it depends on whether the sale is part of a business. This is general information, not tax advice. Speak to a registered tax adviser or to URA before you sign.

The starting facts we could source are these.

• URA's FAQ on taxation of capital gains (FY 2023-24) says: "There is no separate capital gains tax legislation in Uganda." Capital gains are included in and taxed together with business income under section 18(1)(a) of the Income Tax Act.
• The same FAQ defines capital gains as profit from the disposal of a business asset, shares or commercial buildings, and a business asset as any asset used or held ready for use in a business, or held for sale in a business.
• For individuals, gains from disposal of business assets are added to business income and taxed at individual rates. For a company they are added to gross income and taxed at the standard corporate rate of 30%.

The FAQ does not mention trees, timber or forestry. Whether a sale by a private owner of trees they planted is a business disposal, farming income, or something else is a question for a tax adviser. We have not found a URA statement that settles it, so we mark it "VERIFY" and do not state a rate for it. Our page on withholding tax on the sale of land covers the separate land side.

How are income vs capital treatment and rates explained?

"Income" and "capital" matter because the sums are done differently. Where the sale of trees is part of running a plantation business, the receipts are business income, and costs of planting, tending and harvesting may be set against them. Where a tree sale is treated as the disposal of a business asset, the URA FAQ computes the gain as proceeds less the cost base, and says that for assets held 12 months or more the cost base is adjusted for inflation using consumer price index figures. These descriptions come from URA's worked examples for land, not trees, so use them only to understand the method.

For an individual who is tax resident, PwC's Worldwide Tax Summaries, last reviewed on 22 October 2026, lists these annual bands.

Non-resident individuals face different bands, starting at 10% from the first shilling according to the same source. Diaspora Ugandans who sell trees should check their residence status for tax with an adviser, because it changes the rates. Remember that these are rates on chargeable income, which is income after allowed deductions. Rates and thresholds change with each Finance Act, so check the current figures before relying on any table.

Does the buyer withhold tax on a timber sale?

Sometimes. URA's guide to withholding tax says that the Government of Uganda, government institutions, local authorities, companies in which Government has an interest and persons designated by the Minister of Finance must withhold tax at 6% of the gross amount paid for supplies of goods, materials or services to a person in Uganda. The 6% applies where payments to one person, aggregated over a contract, exceed UGX 1,000,000. The agent must remit the tax within 15 days after the end of the month in which payment was made.

That guide, published on 19 August 2022, is the URA source we opened. We could not confirm the 6% rule on the PwC withholding page we checked, and we did not find a current URA statement that changes it, so ask URA or an adviser whether the rule is unchanged. Two practical points follow.

• A private individual buying trees is not, on this guidance, a withholding agent. A large company or a government body may be.
• Whether a standing-tree sale counts as a "supply of goods, materials or services" for this rule is not stated in the URA text we read. If your buyer is a designated agent, ask them to state in writing which rule they apply and give you a withholding certificate.

Ask the buyer before you agree a price whether the quoted price is before or after withholding tax. Our page on fees on a tree sale and the trees-only sale agreement show where to record it.

Do I need a TIN, and what about receipts and EFRIS?

TIN. A Taxpayer Identification Number is the number URA uses to identify you. URA announced that from 6 December 2021 buyers and sellers of land worth UGX 10 million or more must each have a TIN. That announcement is about land, not trees. We did not find a URA rule requiring a TIN for a tree sale. Even so, a registered buyer who must withhold tax will need your details, and a business seller will need one, so getting a TIN before you sell avoids delay.

Receipts and EFRIS. EFRIS is URA's Electronic Fiscal Receipting and Invoicing Solution. A tax alert published by PKF East Africa on 13 August 2026 says that businesses in 12 sectors must issue EFRIS invoices and receipts even if they are not VAT registered. The alert names eight of them, among others: manufacturing, construction, transport and storage, accommodation and food services, ICT, real estate, professional services and fuel wholesale and retail, among others. It does not mention agriculture, forestry or timber, so we cannot say whether a tree seller is covered. Ask URA, and do not assume.

Whatever the rule, keep your own records. We suggest you hold: a written sale agreement naming the trees, block and quantity; proof of each payment; any receipt or acknowledgment; any withholding certificate; and the receipts for your costs. These support your tax return and help if a dispute arises. A buyer will usually ask for them too, especially if they need to show where timber came from. See also permits to cut and move timber.

What should different sellers do?

For mixed lots, receipts should show each species and quantity, which our guide to cypress, grevillea, teak and musizi explains. To sell trees without selling land, read about how to sell trees without selling land. Then list your trees for sale, land not included, with the harvest deadline negotiated with the buyer. You can also see standing trees for sale or browse forest and tree listings, although none are published yet as of 3 November 2026. This is not tax advice.

Frequently asked questions

Related guides

• Forest Trees for Sale in Uganda: Standing Pine and Eucalyptus
• Permits to Cut and Move Timber in Uganda
• List Your Forest on Land & Property
• Sell Your Trees Without Selling Your Land
• Standing Timber Sale Contract: 12 Clauses Sellers Need
• Withholding Tax on Property Deals in Uganda