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 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 information and communications technology (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.
- A preferential CIT rate of 0% for international companies with their regional offices in Rwanda and that fulfil certain requirements, as well as entities registered by philanthropic investors.
- 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) 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.
- Exemption from capital gains tax.
- Five-year tax holiday for micro-finance institutions, and specialised innovation park or specialised industrial park developer.
- Customs exemption on products used in Export Processing Zones (EPZs).
- Prompt settlement of VAT refunds.
- Additional key incentives for priority sectors such as incentives for: the construction and development of the Kigali Innovation City; the creation and growth of the Kigali Financial Centre; for film production and post-production; mining exploration; and start-ups.
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.