There are tax incentives in the form of lower CIT rates (see Special CIT regimes in the Taxes on corporate income section) for registered investors.
The investment code also provides the following incentives to a registered investor:
- A preferential CIT rate of 0% for international companies with their regional offices in Rwanda, as well as entities registered by philanthropic investors.
- A preferential CIT rate of 3% to a pure holding company, a special purpose vehicle registered for investment purpose, a collective investment scheme, foreign-sourced trading income of a global trading or paper trading, and foreign-sourced royalties of an intellectual property (IP) company.
- A preferential CIT rate of 15% for registered investors undertaking (i) exportation; (ii) energy generation, transmission, and distribution; (iii) transport of goods and related activities; (iv) mass transportation of passengers and goods; (v) information and communications technology (ICT); (vi) financial services, including global business activities, private equity funds, fund management, wealth management, mutual funds, collective investment schemes, captive insurance schemes, venture capital, and asset backed securities; (vii) building of low-cost housing; (viii) manufacturing; (ix) information and communication technology; (x) research and development; (xi) electric mobility; (xii) adventure and agriculture tourism, and (xiii) any another priority economic sector as may be determined by an Order of the Minister of Finance.
- A seven-year tax holiday for investments in the following specific sectors: manufacturing, tourism, health, exports, energy projects producing at least 25 MW (excluding investors having an engineering procurement contract [EPC] executed on behalf of the government of Rwanda, and ICT with an investment involving manufacturing, assembly, and service. The investment should be of at least 50 million United States Dollars (USD), and the investor should contribute at least 30% of this investment in the form of equity in these sectors.
- Five-year tax holiday for micro-finance institutions and specialised innovation park developer or specialised industrial park developer.
- Preferential WHT rate of 0% is offered to all entities that qualify for the preferential CIT rate of 3% above, fund management entities, collective investment schemes, wealth management services, financial advisory commercial entities, family office services, fund administrators, financial technology commercial entities, captive insurance schemes, private banks, mortgage finance institutions, finance lease commercial entities, asset-backed securities, reinsurance companies, trusts, and corporate service providers who qualify for the preferential CIT rate of 15% above.
- Preferential WHT rate of 5% on dividend and interest paid to an investor investing in a company listed on the Rwanda Stock Exchange.
- Preferential WHT rate of 10% applicable to specialised innovation park developers or specialised industrial park developers on interest on foreign loans, dividends, royalties, and service fees, including management and technical service fees.
- Registered investors holding a valid exploration licence are entitled to carry forward losses for a period of ten years from the first year of making the loss, this is five years more than the usual years allowed for one to carry forward tax losses.
- Angel investors investing a minimum of USD 500,000 in a start-up will be exempted from CGT and WHT for the first five dividend issuances by the start-up.
- Registered investors with strategic investment projects may be eligible to financing under the Seed Innovation Fund.
- Preferential WHT rate of 0% on foreign specialised services procured and zero rating for goods and services procured locally by a registered film investor.
- Exemption from CGT.
- Prompt settlement of VAT refunds.
- Registered investors are entitled to a flat accelerated depreciation rate of 50% for the first year for new or used assets.
- The law also offers a good number of talent attraction and immigration incentives.
- Additional key incentives for a specialised innovation/industrial park developers.
There are, however, certain conditions that have to be fulfilled to obtain the incentives above.
Foreign tax credit
Rwanda allows a foreign tax credit on income generated from business activities performed abroad by a tax resident. The income tax payable is offset by the foreign tax paid on that income. However, the foreign tax credit is limited to the amount of tax that would have been applicable on that income in Rwanda.
The credit is allowed where it is supported by appropriate evidence, such as a tax declaration, a WHT certificate, or any other similar acceptable document.