Types of withholding taxes
Withholding Tax on other payments
A withholding tax of fifteen (15%) percent is levied on the following payments made by resident individuals or resident entities including tax-exempt entities:
- 1° dividends, except those governed by Article 45 of this law;
- 2° interests;
- 3° royalties;
- 4° service fees including management and technical service fees;
- 5° performance payments made to an artist, a musician or an athlete irrespective of whether paid directly or through an entity that is not resident in Rwanda;
- 6° lottery and other gambling proceeds.
- The withholding agent is required to file a tax declaration based on procedures prescribed by the Commissioner General and transmit the tax withheld to the Tax Administration according to paragraph one of this Article within fifteen (15) working days after the tax is withheld.
- Paragraphs 1 and 2 of this Article are also applicable to non-resident individuals and non-resident entities for such payments that can be allocated to a permanent establishment which that person maintains in Rwanda.
Withholding Tax on Imports and Public Tenders
- A withholding tax of five percent (5%) of the value of goods imported for commercial use shall be paid at custom on the CIF (cost insurance and freight value) value before the goods are released by customs.
- A withholding tax of three percent (3%) on the sum of invoice, excluding the value added tax, is retained on payments Or by public institutions to those who supply goods and services based on public tenders.
- 1° those whose business profit is exempt from taxation;
- 2° those who have tax clearance certificate issued by the Commissioner General.
- The Commissioner General issues a tax clearance certificate to taxpayers who have filed their tax declarations on their business activities; paid the tax due on a regular basis, and have no tax arrears. The certificate is valid in the year in which it was issued.
- The Commissioner General may revoke a tax clearance certificate at any time if the conditions required in paragraph 4 of this Article are not fulfilled.
The following taxpayers are exempt from withholding tax mentioned in paragraph one and 2 of this Article: