Taxes in Rwanda explained: one overview for foreign business owners

Treaty rates, summarised

Rwanda has 13 tax treaties confirmed in force. The table below shows the rates on the four payments that leave Rwanda most often, with a flag for anything that needs care.

Three points follow. Treaties cap interest and royalties at 8% to 10% almost everywhere, so the choice of treaty matters most for dividends and fees. Several of Europe's largest economies, including Germany, the Netherlands and the United Kingdom, are absent, France's treaty is signed but not in force, as are Russia and the EAC neighbours Kenya, Uganda and Tanzania. Payments to them bear the domestic 15%. A qualifying 3% holding pays 0% withholding on its distributions under the investment law, whatever the treaty position of the recipient.

Trading licence tax

Every business pays an annual trading licence tax to the district where it operates. The amount follows the turnover last approved by the RRA, in bands set by Law N° 048/2023 of 05/09/2023. The declaration and payment are due by 31 January of the year concerned. A business that starts during the year pays for the remaining months, including the month it starts.

Immovable property tax

Owners of buildings and plots pay an annual tax on market value: 0.5% for residential property, with lower rates of 0.25% for three-storey and 0.1% for taller residential buildings; 0.3% for commercial property; and 0.1% for industrial property and micro and small businesses. Vacant land is taxed per square metre, from RWF 0 to RWF 80, with a 100% surcharge on undeveloped plots. The value is declared in five-year cycles: the first by 31 December of the first tax period, later ones by 31 December of the cycle's final year. Land parcels are identified by their UPI (Unique Parcel Identifier), which appears on the declaration.

When commercial immovable property is sold, a transfer tax of 2% applies if the seller is registered and 2.5% if not, on the price above the first RWF 5 million. Rwanda has no stamp duty.

Rental income tax

Individuals who let property pay rental income tax to the district: 0% on annual rental income up to RWF 180,000, 20% from RWF 180,001 to RWF 1,000,000 and 30% above. Half of gross rent is deducted as maintenance costs, and proven bank interest on a loan for the property can be deducted on top. The return is due by 31 January. A company that lets property is taxed on the rent under corporate income tax instead.

Tourism tax

Since 2025 accommodation in Rwanda carries a tourism tax of 3% of the room price excluding VAT, under Law N° 015/2025 of 27/05/2025. It applies to hotels, motels, lodges, guest houses and apartments and is declared within 15 days after the end of each month. A lodge near Volcanoes National Park or a guest house in Rubavu adds it to the monthly file beside VAT and PAYE. We confirm the collecting channel when we register the property.

Excise duty

Excise is set by Law N° 050/2023 of 05/09/2023 establishing the excise duty, with lines added by Law N° 011/2025 of 27/05/2025. Rates are by product. Examples from PwC's table: juice from natural fruit 10%; soda and non-natural juices 39%; beer 40% to 65%; wine and spirits 40% to 70%; cigarettes 36% of retail price plus RWF 230 per pack of 20; cosmetics and beauty products 15%; vehicles 5% to 15% by engine size or age; telephone communication 14% from June 2026 and 15% from June 2027. A 15% excise on amounts or commissions charged on financial transactions applies from 01/07/2027. Local manufacturers declare and pay within 5 days after each month; importers pay with customs duties. Since February 2026 excisable products such as soft drinks, alcohol, juices and cigarettes need tax stamps before they leave the factory or customs.

Customs duty and import levies

Rwanda applies the EAC Common External Tariff: 0% on raw materials and capital goods, 10% on intermediate goods, 25% on finished goods and 35% on sensitive goods. On top come a 1.5% infrastructure development levy and a 0.2% African Union levy on imports that are not exempt, and a 0.2% quality inspection fee on all imports, exempt ones included. Since 2025 an environmental levy of 0.2% of customs value applies to listed plastic-packaged imports (Law N° 010/2025 of 27/05/2025). Import VAT at 18% and 5% withholding tax are collected at the same time. Fuel carries a road maintenance levy of 15% of customs value (Law N° 013/2025) and a strategic petroleum reserves levy of RWF 50 per litre (Law N° 012/2025). Since August 2026 a VAT deferral facility applies to qualifying capital goods in Chapters 84 and 85 of the tariff.

Digital services

Two measures apply to the digital economy. Foreign suppliers of online goods and services to customers in Rwanda have been inside VAT at 18% since the end of July 2026, under Ministerial Order N° 004/26/10/TC of 29/04/2026. They register or appoint a representative; otherwise the bank, mobile money provider or payment gateway withholds the VAT. Separately, Law N° 014/2025 introduced a 1.5% digital services tax on non-resident providers with a substantial presence. It applies once a ministerial order sets the criteria, and PwC reported it as still pending in September 2026.

The budget, as announced

The Minister of Finance and Economic Planning, Yusuf Murangwa, presented the 2026/27 budget on 11/06/2026. PwC's budget bulletin puts it at RWF 7,796.3 billion, 12.1% above the revised 2025/26 budget of RWF 6,952.1 billion, with tax revenue of RWF 4,429.1 billion.

On tax, the budget set directions without new rates. KPMG summarised the proposals on 26/06/2026: wider use of electronic billing machines to narrow the VAT gap; better import valuation and classification at customs; gradual alignment with the EAC Common External Tariff, including restoring tariff rates on selected imports; and, under the Medium-Term Revenue Strategy, extending VAT to ICT, fuel and online goods and services, new taxes on the digital economy and on tourism, adjustments to selected excise and income tax rates, and a rationalisation of exemptions. PwC's bulletin adds data integration with banks, AI-based audit risk assessment, stronger transfer pricing enforcement and a wider treaty network.

Several of these directions repeat measures already in law since 2025, such as VAT on ICT equipment, the tourism tax and the digital services tax. None of the remaining proposals had a published rate when we reviewed this page. We apply each measure once its law or order is published, and we do not model announced but unlegislated rates into a client's budget.

Already in force in 2026

• Transfer pricing. Ministerial Order N° 003/26/10/TC of 29/04/2026 lowered the low-tax trigger from 20% to 15% and introduced advance pricing agreements. Since April 2026 the documentation is uploaded on eTax as an annex to the CIT return.
• VAT on foreign digital services. Ministerial Order N° 004/26/10/TC of 29/04/2026, effective from the end of July 2026.
• Tax stamps. Commissioner General directives of February 2026 on excisable products.
• VAT deferral. Guidelines of August 2026 for capital goods in Chapters 84 and 85: existing businesses need at least 90% of turnover from taxable supplies, or 80% for exporters.
• Treaties. Ratification of the treaties with Hong Kong SAR (February 2026) and Botswana (July 2026).
• Simplified accounting. An April 2026 ministerial order sets a simplified accounting method for small businesses that choose to pay tax on actual profits.

Scheduled

• RSSB pension to 7% + 7% on 01/01/2027, then 8%, 9% and 10% each in 2028, 2029 and 2030.
• Excise on telephone communication to 15% from June 2027.
• 15% excise on financial transaction charges from 01/07/2027.
• VAT exemption for fully electric vehicles and charging equipment until 30/06/2028.

Assumptions: turnover RWF 180 million, half to Rwandan clients and half exported. The company is VAT-registered and files quarterly, because turnover is below RWF 200 million. Each employee earns RWF 600,000 gross a month. Operating costs other than payroll, including rent, software, travel and the trading licence, are RWF 76,607,200. The full profit after tax is distributed. Amounts in USD use an illustrative RWF 1,450 per US dollar; the BNR rate on the day applies in practice.

What the company also collects

Some taxes pass through the company without being its cost. On each RWF 600,000 salary, PAYE is RWF 144,000 a month (0 + 4,000 + 20,000 + 120,000). For three employees over a year that is RWF 5,184,000. Employee pension at 6% adds RWF 1,296,000, employee maternity RWF 64,800, and CBHI at 0.5% of net pay about RWF 75,300. Each employee's net pay is about RWF 416,100 a month.

On VAT, the company charges 18% on its RWF 90 million of domestic sales, RWF 16,200,000, and deducts the input VAT on its certified purchase invoices. Its RWF 90 million of exports are zero-rated, so input VAT on costs linked to them stays recoverable. VAT is a cost only where input VAT is lost: missing EBM invoices, claims older than 12 months, or the 40% blocked share on mixed-use costs.

Next year's advance tax

If turnover in the second quarter of the next year is RWF 45 million, the 30 June instalment is RWF 22,400,000 × 45 / 180 = RWF 5,600,000, less any withholding tax suffered in the period.

Three variations

• Shareholder through a UAE holding. Dividend withholding falls to 7.5% under the Rwanda–UAE treaty, RWF 4,320,000. CIT and WHT together become RWF 26,720,000, or 33.4% of profit, if the treaty conditions, including beneficial ownership and substance in the UAE, are met.
• Registered investor in ICT. With an investment certificate and a qualifying activity, the company would pay 15%, RWF 12,000,000, saving RWF 10,400,000 of CIT. Dividend withholding to Germany stays at 15%.
• Management fee to the founder's German company. The deduction is capped at 2% of turnover, RWF 3,600,000, for a related non-resident. The fee bears 15% withholding and, as an imported service, falls within Rwandan VAT.

Tax in Germany on the dividend is outside this example. Without a treaty, relief for the Rwandan withholding depends on German domestic rules, which your German adviser confirms.