Capital gains, property and other taxes: the 10% capital gains tax and who withholds it, restructuring relief, the 1.5% digital services tax, immovable property tax, the tax on sale of immovable property, rental income tax, trading licence tax, excise duty under Law N° 011/2025, gaming tax and the 2025 levies

The taxes beyond income tax and VAT

An investor in Rwanda meets three further groups of taxes. The first is national taxes on capital and on specific activities in the income tax law: capital gains tax, the digital services tax and the gaming tax, all reshaped by Law N° 014/2025 of 27/05/2025 amending Law N° 027/2022 of 20/10/2022 establishing taxes on income (the Income Tax Law), published in the Official Gazette n° Special of 29/05/2025. The second is decentralised taxes: immovable property tax, the tax on sale of immovable property, rental income tax and trading licence tax, which belong to the Districts and the City of Kigali under Law N° 048/2023 of 05/09/2023 determining the sources of revenue and property of decentralized entities (the Decentralised Revenue Law), but which the Rwanda Revenue Authority (RRA) assesses and collects for them. The third is excise duty and levies, rebuilt in the May 2025 tax package by Law N° 011/2025 on excise duty and four new levy laws.

None of these taxes depends on the investor's nationality. What changes the result is the form of the holding (direct or indirect, listed or unlisted), whether the investor holds an investment certificate from the Rwanda Development Board (RDB), and whether the asset is land, a building, a licence or a share. Land rights and their registration are dealt with in Land tax, property tax and transfer costs; this section concentrates on the tax mechanics.

Capital gains tax: rate, scope and who withholds

Article 35 of the Income Tax Law charges capital gains tax on the direct or indirect sale or transfer of shares carried out in Rwanda or abroad; the gain is the difference between the acquisition value of the shares and the sale or transfer price. The duty to withhold is not new. Since the Income Tax Law came into force on 28 October 2022, the original Article 37 has required the resident company whose shareholding structure has been modified, or whose shareholders have changed, to withhold the tax on a direct or indirect sale or transfer of its shares and to declare and pay it within 15 days after the month of the transfer; only the rate, then 5% under Article 36, was different. Law N° 014/2025 changed two things from 29 May 2025: it raised the rate in Article 36 from 5% to 10%, and it replaced Article 37 so that the withholding rule now refers also to licences, debt instruments, options, guarantees and similar assets, on which the seller or buyer withholds. The company, shareholder or buyer declares and pays the tax to RRA within 15 days after the month in which the sale or transfer occurred. Law N° 014/2025 did not amend Article 35, the charging provision, which still refers only to shares; the wider reach to other assets therefore rests on the replaced Article 37 alone, and its application to a particular licence or debt transfer should be confirmed with RRA.

Three consequences follow. First, an indirect transfer, such as the sale of a foreign holding company that owns a Rwandan subsidiary, has been within the charge since 2022 even though no Rwandan party signs the sale agreement, and the Rwandan subsidiary is the person obliged to withhold and pay. Because it receives no part of the price, it needs contractual cooperation and funding from the seller or buyer; acquisition agreements for groups with Rwandan subsidiaries should provide for it. Second, the duty on a Rwandan company to account for tax on a change in its own shareholders makes the share register and RDB filings the practical trigger for RRA's attention (FAQ 98). Third, if the replaced Article 37 is applied as written, the transfer of a mining, telecoms or other regulatory licence, where the licensing law allows it, now carries a 10% charge on the gain, withheld by the seller or the buyer.

The capital gains provisions sit in the part of the Income Tax Law dealing with investment income, which Article 34 defines as income not taxed as business income. Article 35 applies "without prejudice to" Article 19, under which business profit includes the proceeds of sale of any business asset. On that reading, a Rwandan resident company that sells shares it holds as a business asset includes the proceeds in its business profit and is taxed in its corporate return at 28%, and the 10% tax is in substance the regime for sellers whose gain is not business income, such as individuals and non-resident sellers without a permanent establishment in Rwanda. The law does not state expressly how tax withheld by a target company is credited where the seller is a resident company, and that point should be agreed with RRA before closing. Treaty relief may be available where the seller is resident in a treaty state whose treaty allocates the gain to that state; the treaty list is in Withholding taxes and tax treaties.

Exemptions and restructuring relief

Article 38 exempts gains on the sale or transfer of listed shares and other securities on a securities exchange operating in Rwanda, and gains on shares or units of collective investment schemes; listing on the Rwanda Stock Exchange therefore remains a route to a tax-free exit for portfolio holders (Public companies and the Rwanda Stock Exchange). The Annex to Law N° 006/2021 of 05/02/2021 on Investment Promotion and Facilitation (the Investment Code) exempts registered investors from capital gains tax, except on income from the sale of commercial immovable property, and exempts qualifying angel investors on primary-issue shares in start-ups held for at least two years. How the Investment Code exemption interacts with the 2025 extension of the tax to licences and other assets has not been clarified in any published ruling, and an investor relying on it should obtain RRA's confirmation (Investment incentives).

Articles 53 and 54 of the Income Tax Law give restructuring relief. A restructuring includes a merger of two or more entities, an acquisition or takeover of 50% or more of the shares or voting rights of a resident entity, an acquisition or transfer of 50% or more of the assets or liabilities of a resident entity, an acquisition of an entity's entire shares, assets or liabilities so that the acquirer replaces it, and the split of a resident entity into two or more resident entities. The transferring business entity is exempt from tax on gains and losses realised on the restructuring; the receiving entity takes over the assets and liabilities at book value, continues the transferor's depreciation, and inherits its reserves and provisions. The relief is framed for business entities; whether it covers a cash sale of a majority stake to a third party, or removes the 10% tax the target must withhold under Article 37, has not been addressed in any published RRA ruling, so a seller should not assume it without RRA's confirmation. Transfers of assets between related residents on a restructuring are also, on conditions, exempt from VAT (VAT and electronic invoicing).

Two related rules matter on an acquisition. Under Article 31, a change of more than 25% in the direct or indirect ownership or voting rights of an unlisted company cancels its unused tax losses, unless the change results from an internal reorganisation that keeps all the shareholders, each of whom has held shares for at least three years. Under Article 55, on liquidation, what remains after liabilities are paid is treated as a dividend in the company's final tax period, and is subject to dividend withholding tax rather than capital gains tax (Liquidation, striking off and deregistration).

The digital services tax: enacted, not yet operating

Law N° 014/2025 inserted Article 50 bis in the Income Tax Law. A company supplying digital services in Rwanda with a substantial national presence is subject to a tax of 1.5% of its gross revenues sourced from Rwanda during the tax period. The text applies to any company, Rwandan or foreign; it is not confined to foreign platforms. Paragraph (2) reserves to a Ministerial Order the scope of taxable digital services, the definition of substantial national presence, registration, declaration and payment. No such Order appears on RRA's list of Ministerial Orders, and RRA was reported in May 2026 as describing the tax as pending implementation. Until the Order is published, the tax cannot in practice be declared or collected, and nothing in the 2025 law makes it retrospective once the Order appears.

The digital services tax should not be confused with VAT on digital services, which has operated since Ministerial Order N° 004/26/10/TC of 29/04/2026 and requires non-resident suppliers of software, platforms, streaming, online advertising and similar services to Rwandan customers to register or appoint a representative, failing which banks and payment providers withhold the VAT. That regime is explained in VAT and electronic invoicing. Both regimes may apply to the same business.

Immovable property tax and the tax on property sales

Immovable property tax is payable by the owner, the usufructuary or the person deemed to be the owner, and an owner abroad may act through a proxy (Articles 6 and 9 of the Decentralised Revenue Law). Under Article 16 the rates are: RWF 0 to 80 per square metre of land; 0.5% of the market value of a residential building and its plot (0.25% for residential buildings of three floors and 0.1% above three floors); 0.3% for commercial buildings and plots; and 0.1% for industrial buildings and for the premises of micro-enterprises and small businesses. Machinery and equipment attached to a commercial or industrial building are not included in its value. The per-square-metre land rate within each band is fixed by the District Council or the Council of the City of Kigali under Ministerial Order N° 002/23/10/TC of 24/11/2023; in Kigali's central business district the band is RWF 70 to 80 for commercial and industrial land, and the City raised many plots to RWF 80 in February 2025.

Exemptions in Article 12 include one owner-occupied dwelling, farm or forest land of two hectares or less, residential plots without basic infrastructure, condominium plots and common parts, and non-commercial State property. Values are set for five-year cycles (Article 13): a purchase price or valuation from the previous five years stands unless the value has changed by more than 20%, and an RRA counter-valuation prevails where it differs by more than 20%; values come from a certified valuer or mass appraisal. The taxpayer files a declaration by 31 December of the first tax period, and the tax is paid by 31 December each year. Park developers registered under the Investment Code enjoy a five-year property tax exemption.

Article 17 imposes a separate tax on the sale of immovable property: 2% of the sale value of a property for commercial use sold by a seller registered for income tax, deductible in that seller's income tax computation, and 2.5% where the seller is not registered for income tax. The tax is charged on the value above RWF 5,000,000, and not on the price fixed once an auction has begun. The transfer itself and the new land certificate are fee-exempt under Presidential Order nº 075/01 of 04/12/2023, although notarial fees apply.

Rental income tax and trading licence tax

Rental income tax under Articles 39 to 46 of the Decentralised Revenue Law applies to rent earned by individuals and other persons outside corporate income tax. A company's rental income is part of its corporate taxable income under Article 51 of the Income Tax Law. The taxable amount is gross rent less a deemed 50% for maintenance and upkeep, plus actual bank interest on a loan to build or buy the property where the taxpayer proves it (Article 43). The annual rates are 0% up to RWF 180,000, 20% from RWF 180,001 to RWF 1,000,000 and 30% above. The declaration is filed and the tax paid by 31 January of the following year, and a written lease, signed by both parties, must be lodged with the tax administration within 15 days of signature (Article 41). A foreign company renting a house for an expatriate from an individual landlord should therefore expect the landlord to be taxed on the rent, and should keep the written lease.

Trading licence tax (patente) is payable each year by every person carrying on a profit-oriented activity, with a declaration by 31 January (Article 30) and a separate declaration for the head office and each branch, and for each District where business is carried on (Articles 32 to 34). The amount follows the turnover of the previous year under the Annex; a new business declares on the basis of its starting capital. Non-commercial public institutions, and micro-enterprises and small businesses during their first two years, are exempt (Article 36), and a business that stops trading during the year is refunded pro rata after audit (Article 38). Late payment of any decentralised tax carries interest of 1.5% a month, a surcharge of 10% of the tax capped at RWF 100,000, and a penalty of 40% for late or false declarations (Article 51).

Excise duty after Law N° 011/2025

Law N° 011/2025 of 27/05/2025 establishing the excise duty repealed Law N° 050/2023 and came into force on publication on 29 May 2025. The tax period is the calendar month, and the manufacturer or supplier declares and pays within five days after the month (Article 9); excise on an imported product is paid together with customs duties (Customs and EAC trade). The Annex sets ad valorem and specific rates. Products with local content are favoured: beer bears 40% where at least 70% of its raw material (excluding water) is local and 65% otherwise; wine 40% where locally made and otherwise, as the Annex puts it, 70% of the value of a litre not exceeding RWF 40,000; spirits 60% where locally made and otherwise 70% of the value of a litre not exceeding RWF 150,000 (the Annex does not say whether the figure caps the value or the tax); and juice with at least 30% local raw materials 10%, against 39% for soft drinks.

Three entries affect businesses outside the drinks and tobacco trades. Telephone communications bear 12% in the first year after commencement, 14% in the second year and 15% from the third year; on a commencement date of 29 May 2025 the rate at 10 October 2026 is 14%, rising to 15% from 29 May 2027. The amount or commission charged on financial transactions bears 15%; the law states no deferred start, but commentators cite Ministry of Finance and Economic Planning (MINECOFIN) guidance applying it from 1 July 2027, so banks and payment businesses should confirm RRA's position before pricing products. Vehicles bear 5%, 10% or 15% by engine size (below 1,500 cc, 1,500 to 2,500 cc, above 2,500 cc), with hybrids banded by age (not more than three years, more than three and not more than eight, more than eight). Cosmetics and beauty products bear 15%, lubricants 37%, petrol RWF 183 and gas oil RWF 150 a litre.

Gaming tax and the 2025 levies

Since the gaming provisions took effect three months after publication of Law N° 014/2025, that is from about 29 August 2025, a company engaged in gaming activities, other than the national lottery, is exempt from corporate income tax and pays instead 40% of the difference between the total amount wagered and the winnings awarded, declared and paid within 15 days after each month (Article 50). It withholds 25% of the difference between each player's winnings and the amount wagered (Article 61). Gaming is also exempt from VAT.

Four levy laws of 27 May 2025 complete the package. Law N° 015/2025 imposes a tourism tax on accommodation of 3% of the accommodation price excluding VAT, from 1 July 2025, collected by the accommodation facility and paid within 15 days after the month. Law N° 010/2025 imposes an environmental levy of 0.2% of the customs value of imported items packaged in plastic materials, from 1 July 2025, collected at customs; one commercial guide states the rate as 2%, but the Gazette text says 0.2%. Law N° 012/2025 imposes a levy of RWF 50 a litre on petrol and gas oil for strategic petroleum reserves, and Law N° 013/2025 a road maintenance levy of 15% of the CIF value of fuel together with an annual levy on motor vehicles, paid by 31 December: RWF 50,000 for a car or jeep, RWF 100,000 for a pick-up or bus, RWF 120,000 for a truck and RWF 150,000 for a trailer.