Rwanda: Business Environment

Accounting Rules

Tax Year: The standard tax year is the calendar year, although the taxpayer may request a different 12-month period.
Accounting Standards: Companies whose debt or equity securities trade in a public market and companies with public accountability (like banks and other financial institutions) must use full IFRS standards. All companies whose securities do not trade in a public market must use the IFRS for SMEs standard (Companies Act 2009).
Accounting Regulation Bodies: Institute of Certified Public Accountants of Rwanda (ICPAR)
Accounting Reports: The main financial documents in Rwanda are the financial statement, the statement of income, the balance sheet and the cashflow statement.
Publication Requirements: The Board of Directors of every company shall ensure that, within three months following the end of a financial statement, the audit is made and signed by at least one representative of the company. Such an audit shall be submitted to the Registrar General. Every company, other than a small private company, shall ensure that, within thirty days after the financial statements of the company and any group financial statements are required to be signed, copies of those statements together with a copy of the auditor's report on those statements are filed with the Registrar General for registration. A small private company shall file with the Registrar General a financial summary for registration. Furthermore, a company shall have a balance sheet date in each calendar year (Companies Act No. 07/2009).
Professional Accountancy Bodies: Institute of Certified Public Accountants of Rwanda (ICPAR)
Certification and Auditing: The financial statements of all companies, except small private companies, must be audited annually by a licensed member of ICPAR.
Accounting News

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%).

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.

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.

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%
Bilateral Agreement: Rwanda and Mauritius concluded a Double Taxation Agreement.

Sources of Fiscal Information

Tax Authorities: Overview of Rwanda's tax measures in response to Covid-19
Rwanda Revenue Authority
Other Domestic Resources: Ministry of Finance and Economic Planning
Consult the Rwanda Revenue Authority's website tax services section for more information on taxes

Intellectual Property

National Organisations: You can contact the Office of the Registrar General Rwanda Development Board (RDB).
Regional Organisations: Rwanda is a member of the African Regional Intellectual Property Organization (ARIPO) and the World Intellectual Property Organization (WIPO).

Legal Framework

Independence of Justice: The constitution and law provide for an independent judiciary. Rwanda’s judicial system can be considered fairly independent from influences of the government, individuals, or companies, and was ranked 23rd in the global ranking on judicial independence by World Economic Forum in 2017-18 (highest ranking for African countries). However, courts still suffer from a lack of resources and capacity. Rwandan law prohibits torture and degrading treatment.
Checking National Laws Online: Library of the U.S. Congress

Standards

National Standards Organisations: Rwanda Standards Board (RSB)
Integration in the International Standards Network: The Rwanda Standards Board (RSB) is a member of the International Organisation for Standardisation (ISO).
Classification of Standards: RW
Certification Organisations: Rwanda Standards Board (RSB)

Business Practices

General Information
Opening Hours and Days: Governmental offices: 7 a.m. to 4 p.m. - Monday to Friday (generally with a one-hour lunch break)
Private sector (offices): 8 a.m. to 5 p.m. – Monday to Friday (generally with a one-hour lunch break) – 8 a.m. to 1 p.m. on Saturdays
Banking sector: 8 a.m. to 5 p.m. - Monday to Saturday.
Shops: from 8 a.m. to 6 p.m. - from Monday to Saturday. Many shops close early on Saturday and remain closed on Sunday (however, supermarkets and shopping malls are open 7 days a week)

Public Holidays

New Year’s Day	1st January
Day after New Year’s Day	2nd January
National Heroes Day	1st February
Good Friday	between March and April
Easter Monday	between March and April
Genocide against the Tutsi Memorial Day	7th April
Labor Day	1st May
Independence Day	1st July
Liberation Day	4th July
Umuganura Day	Friday of first week of August
Assumption Day	15th August
Christmas Day	25th December
Boxing Day	26th December
Eid El Fitr	the date shall be announced each year according to the lunar calendar
Eid Al Adha	the date shall be announced each year according to the lunar calendar

Holiday Compensation: Except April 7th (Genocide against the Tutsi Memorial Day), if an official holiday falls on one day of the weekend, the following working day shall be an official holiday. If two consecutive official holidays fall on a day of weekend, the two official holidays shall be compensated in one working day that follows. In case of coincidence of two official holidays, the following working day shall be an official holiday to compensate one of the two coinciding official holidays.

Periods When Companies Usually Close

Christmas time	December
Eid El Fitr-Eid Al Adha	the period shall vary each year according to the lunar calendar

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