VAT and withholding tax
Two taxes you meet every month
VAT applies to sales in Rwanda at 18%, invoiced through the RRA's electronic billing system. Withholding tax applies at 15% to most payments leaving the country, unless a tax treaty lowers it. Both are paid by the 15th of the following month. This page covers registration, invoicing, zero-rating and exemptions, the new VAT on foreign digital services, every withholding case and the rates under all sixteen tax treaties.
VAT
The law and the rate
Rwanda replaced its 2012 VAT law in 2023 and amended the new one in 2025. The rate stayed at 18%.
Value added tax is governed by Law N° 049/2023 of 05/09/2023 establishing value added tax, gazetted on 14 September 2023. It repealed Law N° 37/2012. Law N° 009/2025 of 27/05/2025 amended it, mainly by changing the lists of exempt and taxable goods. The Rwanda Revenue Authority (RRA) administers VAT, as it does income tax and customs.
VAT applies to the supply of taxable goods and services in Rwanda, including online services, and to imports of goods and services. The standard rate is 18%. A zero rate applies to exports and to certain supplies to privileged persons. Exempt supplies carry no VAT, and the supplier cannot recover input VAT on them.
When a service is taxed in Rwanda
Services fall within Rwandan VAT in three cases: both the provider and the recipient are resident in Rwanda; the recipient is resident and the service is useful to it in Rwanda; or the provider is resident and the service is useful to the recipient in Rwanda. A Kigali consultancy advising a client in Germany on that client's German business is therefore exporting a service.
Sources: EY Global Tax Alert, Rwanda gazettes new law on value added tax (October 2023); PwC Worldwide Tax Summaries, Rwanda, other taxes (reviewed September 2026).
Registration
How VAT works for a new company
- Registration thresholdTaxable turnover of RWF 20 million in a year or RWF 5 million in a calendar quarter. Register within 7 days after the end of the period in which you crossed it.
- Voluntary registrationPossible earlier. It lets a start-up recover input VAT on set-up costs, which helps exporters and companies with heavy initial spending.
- One registration per companyA company with several branches in Rwanda registers them all under a single TIN for VAT (Art. 31).
- FilingMonthly by the 15th. Businesses with annual turnover of RWF 200 million or less file quarterly within 15 days after the quarter, and may choose monthly.
- Exempt-only businessesA company making only exempt supplies does not register.
- Imports of goodsImport VAT is payable at customs on entry.
Sources: RRA, value added tax guide (2025); PwC Worldwide Tax Summaries, Rwanda, other taxes (reviewed September 2026); EY Global Tax Alert (October 2023).
A company's TIN is issued with its registration at the Office of the Registrar General, but VAT registration is a separate step. If you expect to cross RWF 5 million in your first quarter, prepare for VAT before the first invoice rather than after the quarter closes.
Invoicing
Electronic invoices, certified by the RRA
In Rwanda an invoice is not a PDF from your accounting software. It is a certified invoice issued through the RRA's electronic billing system.
Rwanda introduced electronic billing machines, known as EBMs, to record sales and report them to the RRA. The Electronic Invoicing System came into force on 1 January 2021. Registered taxpayers that make sales issue certified invoices through it at every point of sale, to businesses and final consumers alike. The system generates certified invoices and sends sales data to the RRA in real time.
The VAT law adds an incentive on the buyer's side. Final consumers who give the tax administration an electronic invoice can receive a reward, set by ministerial order (Law N° 049/2023, Art. 27).
Five ways to issue them
- Invoicing softwareInstalled on the company's computers. Aimed at medium and large businesses.
- Mobile applicationInvoices by smartphone; limited to turnover under RWF 20 million.
- Online invoicingFor occasional service invoices; same turnover limit.
- Online sales data controllerConnects your own invoicing software to the RRA.
- Virtual sales data controllerLike the online version, also works offline.
Sources: RRA public awareness materials on EBM; EDICOM, mandatory e-invoicing in Rwanda (EIS); EY Global Tax Alert on Law N° 049/2023, Art. 27.
Choose the invoicing route before you choose the accounting software. A European ERP that cannot connect to a sales data controller means a second system for every Rwandan invoice. Ask your Rwandan suppliers for certified invoices too: they are the evidence behind your input VAT claim.
Input VAT
Recovering the VAT you pay
A VAT-registered company deducts the VAT on its purchases from the VAT on its sales. The 2023 law tightened the conditions:
- Input VAT can be claimed only if the supplier's output VAT has been paid to the tax administration (Art. 17).
- The claim must be made within 12 months of the declaration date of the supporting documents, down from two years under the old law (Art. 17).
- 40% of the VAT on goods and services that cannot be separated between business and personal use is not recoverable (Art. 20).
- Refunds of input VAT are claimed in the tax period in which they arise (Art. 26).
- A return that would reduce VAT payable after the deadline can be amended only after a written application to the Commissioner General (Art. 24).
- Public procuring entities withhold VAT on payments to VAT-registered winners of tenders (Art. 5).
Foreign-currency amounts are converted into RWF at the customs rate for imports and at the National Bank of Rwanda rate on the relevant date otherwise (Art. 32). Invoices to Rwandan clients are in RWF anyway: BNR Regulation 42/2022, as amended in 2025, requires domestic transactions to be priced and settled in Rwandan francs. See corporate bank account.
Sources: EY Global Tax Alert on Law N° 049/2023, Arts. 5, 17, 20, 24, 26 and 32 (October 2023); PKF East Africa on BNR Regulation 89/2025 (June 2025).
Zero and exempt
What carries no VAT
Zero-rated supplies keep the right to recover input VAT. Exempt supplies lose it. For a business with heavy costs the difference is real money.
Zero-rated (0%)
- Exports of goods and servicesIncluding auxiliary services linked to exports.
- Certain tourist booking commissionsListed in Art. 7.
- Supplies to privileged personsDiplomatic missions, government-donor arrangements, technical aid agreements.
- Locally assembled electric and hybrid vehiclesWith batteries and charging equipment.
- Domestic minerals and some donated goodsUnder the conditions in Art. 7.
Exempt
- Financial and insurance servicesIncluding agricultural insurance and certain leases by licensed financial institutions.
- Health and educationGoods and services in both sectors; books, newspapers and journals.
- Residential leases, water, energyClean water services, energy supplies, residential land and buildings.
- Transport other than by landPlus aircraft, spare parts and maintenance tools.
- Unprocessed farm produceAnd processed maize, rice and milk, excluding powdered milk.
- Special economic zonesGoods and services for special economic zones and goods sold in customs.
- Other listed itemsFuneral services, gaming, imported electric vehicles and accessories, some intra-group asset transfers and securitisation transfers to SPVs.
Sources: PwC Worldwide Tax Summaries, Rwanda, other taxes (reviewed September 2026); EY Global Tax Alert on Law N° 049/2023, Arts. 7 and 8; EY Global Tax Alert, 16 June 2025; RRA, VAT guide (2025).
Cross-border services
Imported services and foreign digital services
Services bought from abroad
Imported services are within Rwandan VAT unless they are exempt (Law N° 049/2023, Art. 6). The supply is treated as made on the date the Rwandan importer receives the service (Art. 15). A Rwandan company that buys consulting, software or management services from abroad should therefore expect VAT on those services as well as withholding tax on the fee. Because the foreign supplier is rarely registered in Rwanda, we set up how your company declares that VAT as part of the monthly cycle.
Foreign digital services from July 2026
Ministerial Order N° 004/26/10/TC of 29 April 2026 brings online goods and services supplied to customers in Rwanda into VAT, even where the supplier has no presence in the country. Compliance was required within three months of publication, which places the start at the end of July 2026. The order covers software, cloud tools, streaming, online education, web hosting, online advertising, online gaming and electronic marketplaces.
Rwanda is the place of supply where the customer is in Rwanda or consumption happens there. Indicators include a Rwandan billing address, a Rwandan SIM card or a Rwandan bank account. A foreign supplier must register for VAT in Rwanda or appoint a local representative. If it does neither, the financial institution processing the payment, such as a bank, a mobile money provider or a payment gateway, must withhold and remit the VAT.
Digital services tax
Separately, Law N° 014/2025 introduced a 1.5% digital services tax on gross Rwandan revenue of non-resident digital providers with a substantial presence. It applies once a ministerial order sets the criteria.
Rwandan companies paying foreign SaaS subscriptions by card should check the invoices from August 2026. Where a supplier now charges Rwandan VAT, the invoice should show it; where it does not, the bank may withhold it. Either way the accounting entry changes.
Sources: PwC Rwanda tax alert, VAT has gone digital (2026); EY Global Tax Alert on Law N° 049/2023, Arts. 3, 6 and 15; PwC Worldwide Tax Summaries, Rwanda, other taxes (reviewed September 2026).
Withholding tax
Every withholding case
Withholding tax is a prepayment collected by the payer. For payments abroad it is usually the final Rwandan tax.
| Payment | Rate | Notes |
|---|---|---|
| Dividends | 15% | Not between resident companies, which are exempt. |
| Interest | 15% | Exceptions include deposits held at least a year and certain loans from development finance institutions and to Rwandan banks. |
| Royalties | 15% | |
| Service fees, including management and technical fees | 15% | Transport services excluded. |
| Performance payments | 15% | Artists, musicians, craftspeople, sports and cultural performers. |
| Profits repatriated by a branch | 15% | The branch equivalent of a dividend. |
| Profits converted into shares | 15% | Capitalisation of retained earnings. |
| Reinsurance premiums to non-resident insurers | 15% | Unless the insurer has an agreement with the Government. |
| Unpaid liabilities after 6 months | 15% | Treated as paid if they reduced taxable income. |
| Board and similar allowances | 30% | Law N° 027/2022, Art. 59. |
| Gaming winnings | 15% | On winnings minus the stake. |
| Dividends and interest on listed securities | 5% | Where the recipient is resident in Rwanda or the EAC. |
| Interest on treasury bonds of 3 years or more | 5% | |
| Goods imported for commercial use | 5% | Collected at customs. |
| Payments by public institutions to tender winners | 3% | 15% if the winner is unregistered or has no prior income tax declaration. |
Sources: PwC Worldwide Tax Summaries, Rwanda, withholding taxes (reviewed September 2026); EY Global Tax Alert on Law N° 027/2022, Arts. 59, 60 and 65 (December 2022).
Who is exempt from having tax withheld
For domestic payments, a Rwandan business that holds a tax clearance certificate is exempt from these withholdings, and persons newly registered in the period are exempt too (Art. 65). A foreign recipient has no such certificate, so the payer withholds.
When and how to pay
The payer remits withheld tax to the RRA within 15 days after the end of the month in which the payment was made, alongside PAYE and RSSB contributions. A company paying a foreign supplier on 3 March remits the withholding by 15 April.
Grossing up
Many foreign suppliers quote fees net of all taxes. If your contract obliges the Rwandan company to pay a net amount, the company bears the withholding tax itself and the cost rises: a net fee of USD 10,000 at 15% means a gross fee of about USD 11,765. Read the tax clause before you sign.
Treaties
Rates under Rwanda's tax treaties
Seventeen rows: the domestic rate and sixteen treaty partners. Treaty conditions must be met, including residence and beneficial ownership.
| Recipient resident in | Dividends | Interest | Royalties | Management fees |
|---|---|---|---|---|
| No treaty | 15% | 15% | 15% | 15% |
| United Arab Emirates | 7.5% | 10% | 10% | 10% |
| Singapore | 7.5% | 10% | 10% | 10% |
| Qatar | 5% / 10% | 10% | 10% | 10% |
| Morocco | 8% | 10% | 10% | 10% |
| Luxembourg | 10% | 10% | 10% | 10% |
| Mauritius | 10% | 10% | 10% | 12% |
| Belgium | 0% / 15% | 10% | 10% | 10% |
| Türkiye | 10% | 10% | 10% | 10% |
| China | 7.5% | 8% | 10% | 10% |
| Korea, Republic of | 10% | 10% | 10% | 10% |
| South Africa | 10% / 20% | 10% | 10% | 10% |
| Barbados | 7.5% | 10% | 10% | 15% |
| Jersey | 10% | 10% | 10% | 12% |
| Angola | 10% | 10% | 10% | 10% |
| DR Congo | 10% | 10% | 10% | 14% |
| Congo (Brazzaville) | 10% | 10% | 10% | 12% |
Source: PwC Worldwide Tax Summaries, Rwanda, withholding taxes (reviewed September 2026). Split rates (Belgium 0/15, Qatar 5/10, South Africa 10/20) depend on conditions in each treaty, such as the size of the shareholding; we read the treaty text for your structure before relying on the lower figure.
Three practical points follow from the table. First, treaties cap interest and royalties at 8–10% almost everywhere, so the treaty choice matters most for dividends and fees. Second, some treaties set management fees above the interest rate: 12% for Mauritius, Jersey and Congo-Brazzaville, 14% for the DR Congo, 15% for Barbados. Third, several of Europe's largest economies, including Germany, France, the Netherlands and the United Kingdom, do not appear in the table. Payments to them bear the domestic 15%.
Neighbouring Kenya, Uganda and Tanzania are also absent from the list of treaties in force, despite shared EAC membership. The EAC link matters for the 5% rate on listed securities, not for ordinary dividends.
Before you apply a treaty rate, hold a certificate of tax residence from the recipient's tax authority, dated for the year of payment, and a short note on why the recipient is the beneficial owner. That is what the RRA asks for in an audit, and an audit can reach five years back.
Structuring
Where the parent sits decides the dividend tax
Without a treaty, Rwanda withholds 15% on dividends paid abroad. Its treaties with the Gulf, Singapore and several European and African states bring that down to 7.5–10%.
For a founder from Europe, a holding in the UAE or Luxembourg can be the difference. We check the conditions on both sides before we recommend one.
Dividend withholding tax rates under Rwanda’s tax treaties. Source: PwC Worldwide Tax Summaries, Rwanda, withholding taxes (reviewed September 2026).
Route finder
Find the withholding rate for a payment
Three questions: what you pay, where the recipient lives and whether it can prove treaty residence.
Geography
Where VAT and withholding meet the border
Imports into Rwanda also carry customs duty under the EAC Common External Tariff at 0%, 10%, 25% or 35%, plus a 1.5% infrastructure development levy, a 0.2% African Union levy and a 0.2% quality inspection fee. Rwanda has been an EAC member since 2007.
Sources: PwC Worldwide Tax Summaries, Rwanda, other taxes and withholding taxes (reviewed September 2026).
Words you will see
Terms on RRA documents
The law
What this page relies on
FAQ
Questions founders ask
Do I have to register for VAT straight away?
Only once taxable turnover reaches RWF 20 million in a year or RWF 5 million in a quarter. Earlier voluntary registration is possible and often useful for exporters.
Are my services to foreign clients subject to Rwandan VAT?
Exports of services are zero-rated. A service is taxed in Rwanda when it is useful to a recipient in Rwanda; consulting for a foreign client's foreign business is an export.
Can I issue invoices from my European accounting software?
Only if it connects to the RRA's electronic invoicing system through a sales data controller. Otherwise invoices are issued through one of the RRA's other EBM routes.
What withholding applies to a management fee paid to my UAE holding?
10% under the Rwanda-UAE treaty if the conditions are met; 15% otherwise. The deduction for the fee is capped at 2% of turnover.
Is there a treaty with Germany or the UK?
They do not appear among Rwanda's treaties in force, so payments to them bear 15%.
When is withholding tax paid?
Within 15 days after the end of the month in which the payment was made.
Do foreign software subscriptions now carry Rwandan VAT?
Yes, from the end of July 2026 under Ministerial Order N° 004/26/10/TC. The supplier registers, appoints a representative, or the paying bank or mobile money provider withholds the VAT.