Resident entities are taxed on their worldwide income earned from within and outside Rwanda. Taxpayers that are subject to corporate tax in Rwanda include:

A company established in accordance with Rwandan law and a foreign company registered in Rwanda;
A cooperative society;
A partnership (up to 28 October 2022);
An entity established by a District or the City of Kigali if that entity performs an income-generating activity; and
An association or entity that is established to realize profits regardless of its nature.

Effective 28 October 2022, the scope of the corporate tax is extended to the following categories of taxpayers:

A state-owned company;
A trustee, enforcer, or protector of a trust;
Corporate partners of a partnership including limited partnerships, and limited liability partnerships (individual partners are subject to personal income tax);
A foundation; and
A protected cell company or a cell of a protected cell company depending on the choice of the investor at the time of company registration.

Micro-Enterprises and Small Enterprises

Micro-enterprises are enterprises having a turnover of less than RWF 12 million in a tax year and are subject to flat tax based on the turnover of the enterprise.

Similarly, small enterprises having turnover in the range of RWF 12 million to RWF 20 million are required to pay a lump-sum tax at the rate of 3% on the basis of turnover. However, small enterprises are allowed to opt-out of the lump-sum tax regime, whereby they can choose to be taxed under the normal corporate tax regime with prior intimation to tax authorities. Thereafter, small enterprises are not permitted to change the taxation system for a period of 3 years.

Zero-Rated Entities

Companies and cooperatives carrying out micro-finance activities in Rwanda as approved by competent authorities are subject to corporate tax at a zero rate for a period of 5 years from the date of their approval. However, this period may be renewed on fulfilment of certain conditions as prescribed by the competent authorities (see Sec. 10.).

Newly Listed Companies

Companies newly listed on the capital market are subject to reduced corporate tax rates, based on the percentage of shares sold to the public, for a period of 5 years.

Capital Gains

Capital gains derived from the sale, disposal or transfer of the following assets are subject to capital gains tax:

Immovable commercial property; and
Direct or indirect sale or transfer of shares.

However, the following transactions are exempt from capital gains tax:

Sale or transfer of shares listed on the securities exchange operating in Rwanda;
Sale or transfer of units of collective investment schemes; and
Transfer or shares under restructuring of companies, in respect of the transferring company, subject to certain conditions.

Capital gains derived from the disposal of other business assets are included in the taxable income and are taxed at the same rate as corporate tax.

Dividends

Effective 28 October 2022, dividend income received by a resident company from another resident company is exempt from corporate tax. Previously, the exemption applied only if tax was withheld by the distributing company.

Rental Income

Income derived from the rental of machinery and other equipment including agriculture and livestock equipment in Rwanda is taxed at the same rate as corporate tax. Rental income subject to tax is gross rental revenue reduced by 10% towards deemed expense, interest charges and depreciation.

Digital Services

Effective 28 October 2022, digital services are subject to corporate tax. Digital services include online advertising services, supply of user data, online search engines, online intermediation platforms, social media platforms, online media, digital content services, online gaming, cloud computing services, and standardised online teaching services.

Gaming Activities

Effective 28 October 2022, income from gaming activities is subject to corporate tax. Gaming activities include any game played with cards, dice, tickets, equipment or any machine where the result depends upon the skill of the player or operator, the element of chance, or both, and is played for money or any representative of value. Additionally, income from gambling is subject to tax on a gross basis (see Sec. 8.1.1.).

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