Search
Declare Income Tax
If you carry out taxable income generating activities, you should prepare an annual tax declaration in accordance with procedures specified by the tax administration and submits the declaration together with books of account, related annexes drawn in according with the requirements of the generally recognized accounting principles and any other necessary document required by the tax administration not later than 31st March of the following tax period, unless otherwise provided by this Law.
Once you meet the required annual turnover, you should file your annual tax declaration and financial statements through a qualified professional approved by the tax administration.
In this case, you may apply to the Tax administration for provisionally filing of the tax declaration accompanied by financial statements which are not certified and paying the tax not later than the due date.
Once the request is approved, you submit to the tax administration your annual tax declaration and financial statements certified by a qualified professional within three months from the date of the provisional tax declaration.
Preparations
Before starting the declaration, if you carry out taxable income generating activities, you should prepare the following documents:
- Books of account
- Related annexures
- Record all transactions into annexures
- Know the filing frequency: Monthly or Quarterly.
Once you meet the required annual turnover (From Frw 600,000,000 and above) you must file your annual tax declaration and financial statements through a qualified professional approved by the tax administration.
The penalties and fines for Income Tax are similar to other domestic taxes. The penalties are applied for taxpayers who commits the following wrongful acts:
- Late declaration
- Late payment
- Declaring less than the correct tax due
- Paying less than the tax due declared
1. Penalties for late declaration
Late filing penalties are as following based on turnover
- Taxpayer with turnover between 2-20M: 50,000 Frw
- Non-profit entity, Public institution and Taxpayer with turnover less than 20 M: 300,000 Frw
- Large taxpayer: 500,000 Frw
2. Interests for late payment
A taxpayer who fails to pay tax within the period provided for by the Law pays late payment interests on the amount of principal tax as follows:
| Percentages (%) | Time of delay |
| 0.5 % | If the taxpayer has recorded a delay not exceeding six (6) |
| 1 % | If the taxpayer has recorded a delay of six (6) months in tax |
| 1.5 % | If the taxpayer has recorded a delay of more than twelve (12) |
All types of income tax can be declared either using MyRRA (E-Tax) or M-Declaration except the following:
Real regime: It is declared only through E-tax
Motor vehicle Income Tax: It can be declared through M-Declaration and E-tax
During the current tax period, as a taxpayer you have to declare and pay to the account of the Tax Administration before and not later than 30 June, 30 September and 31 December of the year of taxable business activities, a quarterly prepayment tax calculated from tax paid for the previous annual tax period divided by the turnover of the same tax period, times the current quarterly turnover.
This amount is reduced by the tax withheld in that quarter, unless the taxable income is not included in the total taxable income. If you use a tax period that does not coincide with the calendar year, the quarterly prepayments are calculated according to previous paragraph which says the calculation of IQP, it shall be paid not later than the last day of the sixth month (6), the ninth month (9) and the twelfth (12) month of the tax period of which he or she is allowed.
If you start your business activities during the previous tax period, the turnover of the previous annual tax period is calculated from your turnover of the current quarter divided by the number of months of the previous annual tax period during which you carried on your business activities, times twelve (12) months.
IQP declarations can be declared using M-Declaration (Mobile phone declaration) or E-Tax. It is important to note that only declarations using E-Tax can deduct withholding taxes paid on behalf of the taxpayer within the preceding quarter.
Interests for late payment are non- compounding and calculated on a monthly basis counting from the first day following the day on which the tax would have been paid until the day of payment inclusive. Every month that begins is considered as a complete month.
Interests for late payment cannot exceed one hundred percent (100%) of the amount of tax.
When the taxpayer pays, that payment offsets the tax liability in the following order:
- principal tax;
- administrative fine;
- interests for late payment.
3. Administrative Fines
The following wrongful acts are punished with fixed administrative fine:
- Failure to submit a tax declaration on time;
- Failure to provide proofs required by the Tax administration;
- Failure to cooperate or not to provide information during a tax audit;
- Failure to communicate the capacity or appointment of a representative;
- Failure to keep books and records of controlled transactions;
- To obstruct or attempt to obstruct the activities or duties of the Tax administration;
- Failure to submit financial statements by a person with obligation to submit its financial statements for taxation purpose;
- Failure to provide on due time, fail to provide information or provide incomplete, incorrect or misleading information following a request of the Tax administration;
- Failure to make timely quarter payment on profit tax.
The Administrative fine related to violations of the above provisions is established as follows:
| Fixed fines | Concerned taxpayer |
| Frw 50,000 | For a person not engaged in any commercial activity or a taxpayer whose annual turnover is more than two million Rwandan francs (FRW 2,000,000) but not exceeding twenty million Rwandan francs (FRW 20,000,000). |
| Frw 300,000 | If the taxpayer is a public institution or a non-profit making organization and if the taxpayer’s annual turnover exceeds twenty million Rwandan francs (FRW 20,000,000). |
| Frw 500,000 | If the taxpayer was informed by the Tax Administration that he or she is in the category of large taxpayers |
| Frw 500,000 | if the taxpayer fails to submit his or her certified annual financial statements as required by law. The fine is paid every month until he or she submits them; |
Any person who fails to provide information on time, one who does not provide information or who provides incomplete, incorrect or misleading information following a request of the Tax Administration is liable to a penalty fixed as follows:
| Fixed fines | Concerned taxpayer |
| Frw 500,000 | For a person who has an annual turnover equal to or less than twenty million Rwandan francs (FRW 20,000,000). |
| Frw 2,000,000 | For a person who has an annual turnover exceeding twenty million (FRW 20,000,000) but less than two hundred million Rwandan francs (FRW 200,000,000). |
| Frw 3,000,000 | For a person who has an annual turnover equal to or more than two hundred million Rwandan francs (FRW 200,000,000) but less than six hundred million Rwandan francs (FRW 600,000,000). |
| Frw 5,000,000 | For the person with an annual turnover equal to or more than six hundred million Rwandan francs (FRW 600,000,000). |
The basic administrative fine is doubled or quadrupled when offenses are repeated for the second time or third time in two (2) years.
A qualified professional approved by the Tax Administration who obstructs the activities of the Tax Administration is liable to an administrative fine of two hundred thousand Rwandan francs (FRW 200,000).
The qualified professional approved by the Tax Administration may also be suspended from his or her duties by the Commissioner General for a period of two (2) years.
NON-FIXED ADMINISTRATIVE FINE
A. Administrative fine for non- declaration and non-payment of tax on time
A taxpayer who fails to declare and pay tax within the time limit provided by law pays such a tax and is liable to an administrative fine as follows:
| Percentages (%) | Time of delay |
| 20 % of due tax | If the time limit for payment extends for a period of time not exceeding thirty (30) days. |
| 40 % of due tax | 40 % of due tax |
| 60% of due tax | If the taxpayer exceeds the time limit for payment by more than sixty (60) days. |
A taxpayer who declares tax due within the time limit provided by law but who does not pay that tax in the prescribed time limit, pays the principal tax and an administrative fine as follows:
| Percentages (%) | Time of delay |
| 5% of due | When the taxpayer exceeds the time limit for payment for a period not exceeding thirty (30) days from the final date of payment. |
| 10 % of due principal tax | If the taxpayer paid within a period ranging from the thirty-first 31st to sixtieth (60th) day from the final date of payment. |
| 30% of due principal tax | If the taxpayer exceeds the time limit for payment by more than sixty (60) days from the final date of payment. |
A taxpayer to whom the Commissioner General granted extension for submitting tax declaration is not subject to administrative fine unless the taxpayer failed to respect the extension period.
B. Administrative fines for declaring less than the correct tax due
A taxpayer who rectifies his or her tax declaration and pays relevant tax before he or she is notified of imminent audit of his or her tax is not subject to the administrative fine for
understatement but he or she is liable to late payment fines.
A taxpayer who submits a declaration, and is found by RRA to have declared lower tax due that is more than 10% of the correct amount but less than 20% of the correct amount, he is subject to an administrative fine of ten percent (10%) of the amount of the understatement.
A taxpayer who submits a declaration, and is found by RRA to have declared lower tax due that is more than 20% of the correct amount, must pay the difference and is subject to a fine of 20% of the amount of the understatement.