While establishing is a resident for purposes of income tax, tests are applied to establish whether one is a resident for purposes of international taxation have since and somewhat become archaic considering the digitalization of economies.

When we speak of a resident under the Income Tax Act of Uganda, it's considered to be a resident individual, resident company, resident partnership, resident trust, resident retirement fund, the government of Uganda or a political subdivision of the government of Uganda.

The mode of taxation of residents is that they are taxed from income from all geographical sources. The tests applied can be of advantage to the resident tax payers and a disadvantage to the tax collection team.

Test 1: The Income Tax Act of Uganda while establishing who a resident person is based on the fact that the individual has a permanent home in Uganda. What is then understood as permanent home has been defined differently by the different jurisdictions. However as per the guidance in Cape Brandy Syndicate v IRC the court stated that word are supposed to be given their literal and ordinary meaning and basing on the Black’s Law Dictionary Definition a permanent home is said to be a living or dwelling in a certain place permanently for a considerable length of time. The case law has since hinged on the intention to establish what amounts to permanent home (Joachim v FCT). So therefore if an individual does not have a permanent home in Uganda then the aggregate tests are applied to establish their tax liability. The aggregate tests would be better applicable in a dynamic society where people don't necessarily have to have permanent places of abode to be liable to pay tax.

An individual is resident if that individual has spent an aggregate of 183 days in a calendar year. So then one is a resident if they spend an aggregate of 183 days in Uganda in a given calendar. However to avoid tax liability a taxpayer can then stage their stay in Uganda in such a way that they do not accumulate the number of days that would constitute them as residents for tax purposes. This could be a target tax planning move for the taxpayers

The third test is under Section 9 (1)(c) of the Income Tax Act provides that a resident individual for the year of income if the individual has spent within a period of 3 years an average of days of more than 122 then they qualify to be resident. In the case of Sir George v Commissioner of Income Tax (1967)EA 312 where the court held that it is permissible to aggregate periods of residence with periods of presence. For the taxpayer he/she can decide not to be present in Uganda for three consecutive 3 years and only have presence with calculated days not reaching 122 days with the years of presence spread out to avoid being resident for tax purposes.

I must note that the permanent home test gets impractical and this thus leaves the latter two tests as the better tests to residence since the revenue collecting bodies are not prone to losing out on tax on grounds that the persons don't have permanent residence in Uganda.