RRA Tax Handbook

1 RRA Tax Handbook 2nd Edition November 2019 Disclaimer Disclaimer This information is strictly for the purpose of guidance to our stakeholders and is subject to change on amendment of tax legislation and any other regulations governing tax administration. Rwanda Revenue Authority 2019 First published 2018. All rights reserved. Principal Author: Alasdair Mackintosh, Tax Policy Advisor Co-Author of the Local Government Taxes and Fees Chapter: Dr. Christopher Nell Principal Validation Team: Agnes Kanyangeyo, Drocelle Mukashyaka, William Musoni, Denis Mukama, Victor Uwayezu, Consol Munyankindi, Gerard Abiyingoma, Jeanne Mujawayezu, Harshil Parekh, Aline Shumbusho, Claude Kagaba, Egide Musafiri, Ernest Karasira, Kieran Byrne and Assumpta Mukabaranga. Foreword by the Commissioner General Foreword by the Commissioner General It gives me great pleasure to present to you the 2nd online edition of the Rwanda Revenue Authority (RRA) Tax Handbook .

2 This Tax Handbook is a very important demonstration of RRA s strong commitment to be Here For You, To Serve . This means that at RRA we are striving to provide the best possible service to you, our taxpayers. This Tax Handbook attempts to answer any questions that taxpayers might have about how, when, where, which taxes, what amount and even why they pay taxes. In this printed edition, we include an update on the new tax laws concerning income, property, excise and tax procedure. This covers all aspects of domestic taxes, local government taxes and fees, and customs duties. This means that for the first time, all of Rwanda s tax laws, processes and procedures are summarised in one place for the benefit of all taxpayers. Foreword by the Commissioner General Another important aim of this Handbook is to show taxpayers the ease with which they can declare and pay taxes online or on their mobile phones.

3 Simple step-by-step guides illustrate how to declare taxes using E-Tax, M-Declaration and the Local Government Taxes (LGT) system. After declaring, taxes can then easily be paid using systems such as E-Payment, Online Banking, MTN Mobile Money and Mobicash. All of these systems mean that it has never been easier, and never taken less time, to comply with your tax obligations. In addition, the sections on general RRA information are very important to show taxpayers the processes by which RRA monitors tax compliance, negotiates payment of unpaid due taxes, allows for fair hearings and penalises non-compliance. Finally, the ultimate aim of this Tax Handbook is to help taxpayers. We want taxpayers to understand fully their tax obligations. We want taxpayers to know that RRA is working for them. We want taxpayers to tell their friends, suppliers, customers and competitors that paying their taxes has never been easier and has never been more important in financing the development of our country.

4 Pascal BIZIMANA RUGANINTWALI Commissioner GeneralContents Contents Disclaimer .. 2 Foreword by the Commissioner General .. 3 Contents .. 5 Tax Types Summary .. 11 Introduction .. 14 RRA Contact Details .. 26 General RRA Information .. 30 Definitions .. 30 Acronyms .. 33 Laws, Ministerial Orders and Rulings .. 35 Obligations and Bookkeeping .. 36 Audits .. 38 Refunds .. 41 Appeals .. 43 Instalments, Waivers and Seizures .. 45 Certificates VAT, Quitus Fiscal and Tax Clearance Certificates (TCCs) .. 48 Motor vehicle Registration Transfer .. 53 Registration .. 55 Explanation of Registration .. 55 Step-by-Step Guide to Business Registration .. 67 Domestic Taxes and E-Tax .. 72 Contents Explanation of Domestic Taxes and E-Tax .. 72 Step-by-Step guide to declaring domestic taxes using E-Tax .. 77 Domestic Taxes Penalties and Fines .. 92 Income Tax (PIT and CIT) .. 99 Explanation of Income Tax .. 99 Real Regime Details.

5 115 Declaring Flat Tax, Lump Sum and IQP Income Tax using M-Declaration .. 123 Declaring Motor vehicle Income Tax using M-Declaration .. 126 Declaring Flat Tax Income Tax using E-Tax .. 128 Declaring Lump Sum Income Tax using E-Tax .. 130 Declaring Real Regime Income Tax using E-Tax .. 138 Declaring Instalment Quarterly Prepayment (IQP) Income Tax .. 156 Income Tax (PIT and CIT) Penalties and Fines .. 162 Pay As You Earn (PAYE) .. 163 Explanation of PAYE .. 163 Explanation of RSSB Contributions .. 172 Declaring PAYE and RSSB Contributions .. 178 PAYE and RSSB Contributions Penalties and Fines . 187 Value Added Tax (VAT) .. 188 Contents Explanation of VAT .. 188 Declaring VAT .. 201 VAT Penalties and Fines .. 211 Electronic Invoicing System (EIS) .. 212 Explanation of Electronic Invoicing System .. 212 EIS/EBMs Penalties and Fines .. 228 Excise Duty .. 231 Explanation of Excise Duty.

6 231 Declaring Excise Duty .. 239 Excise Duty Penalties and Fines .. 247 Withholding Taxes (WHT 15% and WHT 3%).. 249 Explanation of Withholding Taxes .. 249 Declaring Withholding Taxes (WHT 15% and WHT 3%).. 259 Withholding Taxes (WHT 15% and WHT 3%) Penalties and Fines .. 265 Gaming Taxes .. 266 Explanation of Gaming Taxes .. 266 Declaring Gaming Taxes .. 270 Gaming Taxes Penalties and Fines .. 277 Tax on Minerals .. 278 Explanation of Tax on Minerals .. 278 Declaring Tax on 283 Contents Tax on Minerals Penalties and Fines .. 287 Capital Gains Tax .. 288 Explanation of Capital Gains Tax .. 288 Declaring Capital Gains Tax .. 290 Capital Gains Tax Penalties and Fines .. 291 Local Government Taxes (LGT) and Fees .. 292 Introduction to LGT and Fees .. 292 Immovable Property Tax .. 295 Trading License Tax .. 307 Rental Income Tax .. 314 Local Government Fees .. 319 Tax 325 Registering for LGT and Fees.

7 330 Declaring Local Government Taxes (LGT) and Fees using the LGT system .. 331 Local Government Taxes (LGT) and Fees Penalties and Fines .. 349 352 Explanation of Customs .. 352 Customs Duties .. 363 Clearing Agents .. 374 Border Posts and Dry Ports .. 376 Contents Declaring Imports and Exports .. 387 Facilitation Schemes .. 389 importing Motor Vehicles .. 397 Customs Penalties and Fines .. 404 Paying Taxes .. 407 Methods of Paying Taxes .. 407 Acknowledgement Receipts .. 409 Paying Taxes online using Internet Banking and E-Payment .. 415 Paying taxes on mobile phones using MTN Mobile Money .. 417 Paying taxes through agents with Mobicash .. 419 Paying taxes at a Bank .. 420 De-Registration .. 421 Summary Pages .. 424 Registration 424 Domestic Taxes and E-Tax Summary .. 426 Income Tax (PIT and CIT) Summary .. 429 Pay As You Earn (PAYE) Summary .. 438 Value Added Tax (VAT) Summary.

8 441 Electronic Invoicing System (EIS) Summary .. 443 Excise Duty Summary .. 445 Contents Withholding Taxes (WHT 15% and WHT 3%) Summary .. 448 Gaming Taxes Summary .. 450 Tax on Minerals Summary .. 452 Capital Gains Tax Summary .. 454 Local Government Taxes (LGT) and Fees Summary 456 Customs Summary .. 462 Paying Taxes Summary .. 466 Tax Types Summary .. 468 Quick Reference Contents .. 471 Tax Types Summary Tax Types Summary Description Tax Type(s) Declaration and Payment Deadlines Page For all Income Tax (PIT or CIT), including Instalment Quarterly Prepayments (IQP) Trading License Tax Public Cleaning Service Fees 31st March of following year 30th June, 31st September and 31st December of current year 31st March of current year 5th of following month 99 112 307 322 .. with employees Pay As You Earn (PAYE) RSSB contributions 15th of following month 15th of following month 163 172 .. with annual turnover above FRW 20,000,000 Value Added Tax (VAT) 15th of following month 188.

9 Which import or export goods Customs Duties when importing or exporting 352 Tax Types Summary Description Tax Type(s) Declaration and Payment Deadlines Page .. which manufacture juices, sodas, mineral waters, beers, wines, spirits, oils, lubricants, motor vehicles, powdered milk or airtime Excise Duty 5th, 10th and 15th of following month 231 .. which make payments of interest, dividends, royalties, service or consultancy fees, for performances, or to non-registered businesses Withholding Taxes 15th of following month 249 .. which pay out gambling proceeds Gaming Taxes 15th of following month 266 .. which export minerals Tax on Mining 15th of following month 278 Tax Types Summary Description Tax Type(s) Declaration and Payment Deadlines Page For all Immovable Property Tax 31st December of that year 295 .. renting out property Rental Income Tax 31st January of following year 314 For all .. who have sold commercial immovable property or shares Capital Gains Tax 31st March of following year 288 For.

10 importing a car importing Motor Vehicles when importing 397 .. buying a car locally Motor vehicle Registration Transfer when buying the car 53 .. requiring District s services or authorisation Local Government Fees before the service or authorisation is provided 319 Introduction Here For You, To Serve - Call the RRA Call Centre on 3004 14 Introduction We cannot rely on foreign aid forever. We are a population of 11 million people and those paying taxes are doing a good thing; however, .. if the national budget is to be fully supported by Rwandans, then we carry on sensitizing people on their role of contributing to the country s development. If we work hard and ensure that our budget is fully funded by domestic resources, then we shall have only one master our people. His Excellency Paul Kagame, President of Rwanda speaking at the 2013 Taxpayers Appreciation Day I like paying taxes.