RWANDA Law and Practice Contributed by: Aimery de Schoutheete and Penina Ngabire, Liedekerke Great Lakes
• 10% (intermediate goods that are used as input for further processing); • 25% (finished goods); or • 35% or above (sensitive items the import of which is discouraged by the EAC countries). No Stamp Duty Rwanda does not currently have a stamp duty Any taxpayer may request the tax administra - tion to enter into an advance pricing agreement (APA) for a fixed period to determine modalities for setting prices and profits complying with the arm’s length principle. 4.2 Tax Incentives for Mining Investors and Projects regime for shares or bonds. Advance Pricing Agreement Under Law No 006/2021 of 5 February 2021 on investment promotion and facilitation (the “Investment Law”), mining activities related to exploration, processing and value-addition, and export are considered priority economic sec - tors. A mining company registered in Rwanda can become a registered investor by register - ing their investment with the RDB and can thus benefit from various tax incentives. Registered mining investors can also negotiate tax stabilisa - tion agreements with the state. Tax Incentives for Mining Investors and Projects A mining investor registered with the RDB can benefit from various tax incentives, including: • a preferential corporate income tax of 15% (instead of 28%) provided that at least 50% of the turnover of the company comes from exporting minerals processed in Rwanda; • a corporate income tax holiday of up to seven years, provided that the company invests at
least USD50 million and that at least 30% of this investment is in equity; • exemption from CGT (instead of paying 5%); • exemption from customs taxes and duties for products used in export processing zones (according to RDB’s website and guidelines, this exemption applies to all heavy mining machinery imported into Rwanda); • VAT exemption on mining equipment (instead of paying 18%); • accelerated VAT refund where applicable; and • accelerated depreciation for the first year for new or used assets. In addition, a registered investor holding a valid exploration licence is entitled to carry forward losses for a period of ten years (instead of five years) from the first year of making the loss, by deducting losses in the order in which they were incurred. This incentive is applicable if the explo - ration expenditure has accounted for at least 50% of the investor’s total expenditure during the years in which losses were made. It is not clear from the Investment Law whether these losses can still be carried forward once the registered investor has obtained a mining licence. However, the company could seek to obtain such a guarantee from the RDB (and the RMB) during negotiations. The company cannot in principle benefit from a preferential withholding tax on dividends, royal - ties, interest and service fees (the standard rate of 15% applies), unless it is entitled to preferen - tial treatment under an international instrument (bilateral investment treaty or multilateral treaty). Tax Stabilisation Agreements Tax stabilisation agreements are not currently covered by Rwandan tax legislation. That said, there is nothing to prevent investors from nego -
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