The standard VAT rate is 18% and is levied on the sale of goods and services, including imports.

Certain goods and services are either exempt from VAT and exports areor zero-rated. Effective 14 September 2023, the electronic supply of goods and services isare subject to VAT.

Zero-Rated Supplies Include:

Export of goods;
Export of services, which means a service provided for use or consumption outside Rwanda, whether the service is supplied in Rwanda or both inside and outside Rwanda, but which does not have any impact on the recipient's interest in Rwanda;
Minerals sold in the domestic market (effective 14 September 2023);
International transportation services of goods (effective 14 September 2023); and
Locally assembled electric vehicles, hybrid vehicles, relevant batteries, and charging station equipment (effective 14 September 2023).

Exempt Supplies Include:

Unprocessed agricultural products;
Financial and insurance services;
Educational services;
Medical services;
Supply of water service;
Books and newspapers;
Agricultural, animal husbandry and horticultural services;
Transportation of passengers (excluding for hire);
Lending or leasing interests in land or building for residential purposes;
Funeral services;
Energy supplies;
Sanitary pads (effective 14 September 2023);
Processed maize, rice, and milk (effective 14 September 2023);
Agricultural insurance services (effective 14 September 2023);
Gaming activities (effective 14 September 2023);
Aircraft, their spare parts, and maintenance tools (effective 14 September 2023);
Imported electric vehicles, hybrid vehicles, relevant batteries, and charging station equipment (effective 14 September 2023); and
Mobile handsets and equipment for information, communication, and technology.

Registration Threshold

Taxpayers are required to register for VAT if the taxable turnover is RWF 20 million or more in a period of 12 months or RWF 5 million in a calendar quarter.

Returns and Payments

Taxpayers are required to file VAT returns and make corresponding tax payments on a monthly basis within 15 days after the end of the VAT period.

However, taxpayers with an annual turnover of up to RWF 200 million may elect to file VAT returns or make VAT payments on a quarterly basis within 15 days after the end of the quarter..

Effective 11 January 2023, the deadline for the filing the return and making tax payment for each quarter is fixed as follows:

For the first quarter - not later than 15th April;
For the second quarter - not later than 15th July;
For the third quarter - not later than 15th October; and
For the fourth quarter - not later than 15th January.

A taxpayer whose annual turnover is equal to or less than RWF 200 million may opt to declare and pay on a monthly basis, which is irrevocable for two years.

COVID-19 Emergency Measures

In response to the COVID-19 pandemic, under the Manufacture and Build to Recover Program, certain VAT exemptions are provided for general construction projects with a value of at least USD 10 million, factory construction projects with a value of at least USD 1 million and agro-processing plant construction projects with a value of at least USD 100,000. The exemption is available until 2025 and applies on:

Construction materials not available in the East African Community;
Locally acquired materials; and
Locally sourced machinery and raw materials for registered investors in the manufacturing sectors.

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