Mini Bakeries Uganda Limited v Uganda Revenue Authority
Tax Appeals Tribunal, Application No. 330 of 2025. 21 August 2026.
The trademark in Mauritius
A bakery paid 2% of sales in royalties to a Mauritian company that owned its brand but did nothing to build it.
The situation
A bread maker paid a 2% royalty to a related Mauritian company that held legal title to its brand, assigned to it in 2010 for no disclosed price. It also lent about USD 2.2 million to group companies in Kenya and Tanzania at 4.6% to 10%. A transfer pricing audit of 2015 to 2023 adjusted both.
How it was resolved
The Tribunal upheld the adjustments. Under the licence the Ugandan company did all the developing, maintaining and protecting of the brand at its own cost; the owner only held title, and documentation with no functional analysis could not support the royalty. The loan rates were not shown to be arm's length, and the taxpayer did not discharge its burden. Withholding tax and VAT already paid on the royalties were not refunded.
What a practitioner takes from it
A royalty must follow who actually develops and protects the intangible, not who owns it on paper.
A benchmarking study without a functional analysis carries little weight.