Rwanda

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TAXES - ACCOUNTING

 

 

Corporate tax

Tax rate for resident companies

The tax rate is 35% of the taxable profits, paid within the period prescribed for filing returns, not later than 30th June of the subsequent year.

   
   
   




Income tax

   
Income tax rate For purposes of calculating taxes due from individual businesses and incomes from remunerations, the tax scale used is as follows :

0% for the first bracket of income of 180.000 Frw
15% on the bracket of income of 180.001 - 360.000 Frw
25% on the bracket of income of 360.001 - 600.000 Frw
30% of the bracket of income of 600.001 -960.000 Frw
35% of the taxable income above 960.000 Frw.

   
Tax deductions or other allowances As explained in article 4 of law nš 43/2002 of 31/12/2002, the following have been added on to the list of exemption:

a) Pensions, Guarantees, income and allowances given according to laws on pensions, compensations to incapacity caused by work related accidents or due to death, pensions to the incapacitated, widows, orphans and parents of soldiers who die on the battle field, victims of accidents due to work, sickness while on duty and congenial deformity and food allowance.
b) Diplomats and diplomatic staff, consuls and consular staff accredited to Rwanda, high ranking executives of international organisations, as per legal taxation and customs provisions relating to diplomatic exemptions as well as persons or companies exempted as per special agreements ratified according to Rwandan law.
c) Medical expenses incurred by the employee or his/her legally accepted dependents which are reimbursed by the employer. For this exemption to be effective, it is important that the taxpayer provide sufficient proof to indicate that the said expenses was in fact incurred on treatment. The percentage, which the employer contributes to assist his employee in medical insurance, is determined after deducting tax due.
d) Meals or refreshments provided by the employer to the employee in the premises operated by the employer or any other person who is appointed by the employer to do so, for the benefits of all employees and which are availed to all full time employees on equal basis.
e) Expenses incurred by the employer on staff training.
f) Refundable travel expenses incurred on work missions. It therefore differs from the allowance given to an employee to facilitate his movements to and fro work. The latter is taxed.
g) Mission allowances.



VAT rates

Standard rates The standard tax rate is 18% to all taxable goods and services.
   
Reduced rates As for goods or services consumed by privileged persons, the VAT rate is fixed at 0%. This is meant to ensure that any VAT paid by those persons as part of the purchase price is refundable. Rwanda Revenue Authority refunds the VAT.

The privileged persons include those with diplomatic status; it also includes those dealing in exports as well as donor-funded projects run under an agreement between the Government of Rwanda and the donor.



Other important taxes


Name of tax
Rate
The Real and/or Lump sum taxation regimes  
Anybody having a turnover that is equal to or above 36 Millions per year. Under the lump sum taxation regime, the tax rate is 4% of the annual turnover.  
Tax on Loans  
This tax is charged on:
· Interest gained from loan used for investment in companies residing in Rwanda or having headquarters in Rwanda.
· Profit that includes interest on loan invested in companies or given to self-employed persons, who are not resident in Rwanda or those not having their headquarters in Rwanda.
The tax rate is 20% of the taxable profit  
Property tax  
Motor boats and other motor driven marine vessels: 1800Frw per cubic meter.
Vehicles: The tax is calculated basing on the power of the engine (its unit measurement being cubic centimetres (cc). Hence 1200/cc.  


 



Useful links
For further information on tax issues in Rwanda, please contact the Rwanda Revenue Authority, which was set up in January 1997.

Last modified in 2006 - ongoing update
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