Global Automatic Exchange of Information (AEOI) in Tax Matters – Enforcement & Compliance in Uganda

The Uganda Revenue Authority (URA), through a public notice dated 25th November 2025, warned Ugandan tax residents about the risks of failing to declare income earned outside Uganda. This follows the implementation of the Automatic Exchange of Information (AEOI) framework, which enables URA to access financial information that was previously unavailable. URA encourages taxpayers with undeclared foreign income or offshore assets to take advantage of the Voluntary Disclosure Programme, which offers reduced penalties and interest, immunity from prosecution, and flexible payment arrangements for those who voluntarily correct their tax affairs.

AEOI is part of the global trend towards tax transparency and combating tax evasion. Developed by the OECD and the G20, the framework was created in response to growing concern that individuals and corporations were shifting income across borders beyond the reach of national tax authorities. In Uganda, AEOI is implemented under the Convention on Mutual Administrative Assistance in Tax Matters (Implementation) Act, Cap 335, which authorises URA to receive and exchange financial information with tax authorities in other participating jurisdictions.

AEOI operates through the exchange of taxpayer financial information between jurisdictions. Over 125 countries have implemented or committed to implement the system. Financial institutions in participating countries are required to identify account holders who are tax residents of other jurisdictions and report relevant details such as account balances, interest, dividends and other income to their local tax authorities. That information is then automatically shared with the taxpayer’s country of residence. As a result, Ugandan tax residents with accounts abroad may now be identified and reported to URA.

The AEOI system is guided by the Common Reporting System (CRS), which provides operational rules for due diligence, identification of reportable accounts, and timelines for reporting. Under CRS, financial institutions rely on self-certification forms and identify documentation, as well as indicators such as physical addresses, telephone numbers, transfer instructions and third-party mandates, to determine a person’s tax residency. With the main objective being transparency and compliance monitoring information of an account meeting the reporting criteria will be exchanged even with no tax payable immediately.

Under the law, URA is designated as Uganda’s competent authority responsible for receiving, collecting, safeguarding and exchanging financial information with other tax authorities through secure international systems. The information may be exchanged automatically, upon request, spontaneously where tax risks are suspected, or through simultaneous cooperation between multiple jurisdictions.

Financial institutions, including commercial banks, investment entities, depository institutions and insurance companies, are required to perform due diligence checks and file returns for reportable accounts. The information reported includes the name, address, tax identification number, date and place of birth of the account holder, account numbers, controlling persons where applicable, and the identity of the reporting institution. Institutions may outsource compliance function to specialised service providers where necessary.

Non compliance carries serious consequences. Financial institutions face penalties ranging from fines of UGX 5 million per day of default to fines of up to UGX 50 million and imprisonment of up to 10 years for serious offences. Taxpayers who fail to disclose foreign income risk future reassessment, penalties, interest and possible enforcement action once URA receives matching data from foreign jurisdictions.

Taxpayers with foreign income or offshore assets are advised to urgently review their tax affairs and where omissions exist, apply to amend their tax returns under the Voluntary Disclosure Programme to benefit from penalty waivers and other protections. Financial institutions, on the other hand, are expected to strengthen compliance systems, improve customer due diligence processes, and ensure secure reporting in the prescribed formats.

Although Uganda’s tax laws have long required residents to declare worldwide income, the AEOI framework strengthens URA’s enforcement ability. This has gradually been implemented through public notices, including the launch of the voluntary disclosure initiative in December 2024, directives to financial institutions to begin filing AEOI returns in May 2025, and in November 2025, URA had actively started receiving overseas financial data. Further guidance was issued in January 2026, urging taxpayers to regularise their tax affairs by 30th June 2026, in order to benefit from the waiver programme.

The AEOI framework represents a major shift in Uganda’s ability to detect offshore income and assets. While taxpayers should not panic, they must take proactive steps to ensure compliance, as the voluntary disclosure window provides an opportunity to correct past omissions before URA escalates enforcement.