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Tax rates in Rwanda

Tax Rates

Consumption Taxes

Nature of the Tax
Value-Added Tax (VAT)
Tax Rate
18% (standard rate)
Reduced Tax Rate
Exports of goods and services, goods and services supplied to diplomatic and consular missions, and services rendered to a tourist for which value-added tax has been paid are zero-rated.
Certain goods and services are exempt from VAT, for instance: unprocessed agricultural products; financial services; educational services; medical services; agricultural, animal husbandry and horticultural services; transportation of passengers (excluding for hire).
Other Consumption Taxes
Excise tax is imposed on the manufacturer or importation of certain products and services, like soft drinks (5-39%), bottled water (10%), cigarettes (36% + RWF 30 per pack), alcohol (60-70%), fuels (RWF 183/lt on premium fuel and RWF 150/lt on gas oil), lubricants (37%), motor vehicles (between 5-15% according to the engine capacity), telephone communication (10%).

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Corporate Taxes

Company Tax
30% of the taxable profits
Tax Rate For Foreign Companies
Residents are taxed on their worldwide income. Non-resident entities are taxed on the Rwanda-sourced income through a permanent establishment.
Companies that have a place of effective management in Rwanda at any time during the tax period are considered resident for tax purposes.
Capital Gains Taxation
Capital gains on the direct or indirect sale or transfer of shares or debentures are taxed at 5%. Certain transactions are exempt from taxation: sale or transfer of units of collective investment schemes, sale or transfer of shares on the capital market, and gains resulting from the restructuring of companies in respect of the transferring company.
Gains arising from the sale of commercial immovable property are subject to tax at the rate of 30%.
Main Allowable Deductions and Tax Credits
Generally, all expenses corresponding to an actual cost and used for activities related to the tax period are deductible, provided they are not capital in nature.
Interests paid on borrowed money used for business purposes or interests in respect of an amount payable for property acquired to earn income are deductible. Donations to charitable organisations and other non-profit making organisations are tax-deductible (capped at 1% of turnover). Bad debts are deductible under certain conditions. Purchased goodwill can be depreciated at the rate of 10%.
Taxes are not deductible, so as fines and penalties.
Tax losses can be carried forward for five fiscal years; however, if the direct or indirect ownership of the share capital or the voting rights of an unlisted company changes more than 25% by value or by number during a tax period, such a company is restricted from carrying forward losses incurred during the tax period and previous tax periods. The carryback of losses is not allowed.
Other Corporate Taxes
Other taxes include a transfer tax (fixed fee of RWF 20,000) and a property tax (a thousandth of the taxable value per year). A trading licence fee applies at the district level based on turnover, varying between RWF 60,000 (for turnover below RWF 40 million) and RWF 250,000 (for turnover above RWF 150 million).
Concerning social security contributions, an employer is required to contribute 5% of the employee’s gross salary to the Rwanda Social Security Board (RSSB) scheme, with the employee contributing 3%. An extra contribution of 0.3% is required for maternity leave benefits.
Other Domestic Resources
Rwanda Revenue Authority (RRA)
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Country Comparison For Corporate Taxation

  Rwanda Sub-Saharan Africa United States Germany
Number of Payments of Taxes per Year 9.0 36.6 10.6 9.0
Time Taken For Administrative Formalities (Hours) 90.5 284.8 175.0 218.0
Total Share of Taxes (% of Profit) 33.2 47.3 36.6 48.8

Source: Doing Business, Latest available data.

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Individual Taxes

Tax Rate

Taxes due from individual businesses and incomes from remunerations from 0 to 30%
360,000 RWF or less 0%
360,000 - 1,200,000 RWF 20%
More than 1,200,000 RWF 30%
Casual labour Up to RWF 30,000: 0%
Above RWF 30,000: 15%
Allowable Deductions and Tax Credits
Expense incurred wholly and exclusively in the production of employment income can be deducted. Deductions are available for retirement contributions made to a qualified pension fund (subject to a limit of the lower of 10% of employment income or RWF 1.2 million per year).
Special Expatriate Tax Regime
Residents are taxed on their worldwide income, whereas non-residents are taxed on their Rwandan-sourced income. Both residents and non-residents are subject to the same tax rates.
An individual is considered resident if he/she stays in Rwanda for more than 183 days in any 12-month period, either continuously or intermittently; or if he/she has a permanent residence or an abode in Rwanda.

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Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Consult the list of Double Taxation Avoidance Agreements signed by Rwanda
Withholding Taxes
Dividends: 15%; Interest: 15%; Royalties: 15%

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Latest Update: November 2022

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