Rwanda's new ministerial order brings digital services, from cloud computing to ride-hailing platforms, within the VAT net, while tightening collection mechanisms, updating industrial exemptions, and formalising invoice correction procedures.
Rwanda’s government has published Ministerial Order No. 004/26/10/TC of 29 April 2026 in the Official Gazette No. Special of 29/04/2026, which introduces several key changes and measures regarding Value Added Tax (VAT) on online services, industrial tax exemptions, and invoice adjustments.
The Ministerial Order implements Article 3 of the VAT Act 2023, bringing electronic and digital supplies within the scope of VAT.
The Order entered into force on the same day of its publication.
Taxation of online goods and services
The Order establishes a comprehensive framework for taxing goods and services provided via the internet.
- Taxable services: A wide range of digital activities are now explicitly taxable, including software updates, transportation-hailing platforms, online gaming, search engine services, data monetisation, social media, cloud computing, and digital content like music and films.
- Determination of supply in Rwanda: Goods and services are considered supplied in Rwanda—and thus taxable—if the recipient is in Rwanda, the services are consumed in Rwanda, or the payment method (bank account, billing address, or SIM card country code) is Rwandan.
- Mandatory registration: Suppliers outside Rwanda providing services to Rwandan customers must register for VAT or appoint a local representative to handle tax obligations. Local online suppliers must also register and provide proof of registration with relevant state regulators.
Payment and collection measures
New mechanisms ensure VAT is collected even from non-resident entities. If an online supplier is not registered in Rwanda, the financial institution facilitating the payment (e.g., a bank or payment processor) is responsible for withholding and remitting the VAT to the tax administration. Financial institutions are required to link their payment systems with the tax administration’s electronic systems to facilitate real-time information exchange regarding VAT payments.
Industrial VAT exemptions
The Order updates the requirements for industries to be exempted from VAT on machinery, capital assets, and raw materials. To qualify, an industry must be a registered company, cooperative, or individual enterprise engaged in processing raw materials or assembling parts to produce goods for sale.
Industries must prove that the value added to raw materials is at least 30%. Exemptions only apply to items appearing on a specific list established by the Minister in charge of industry and approved by the Minister in charge of taxes.
The Order specifies that the renewal of eligibility for these VAT exemptions will not be granted beyond 30 June 2026.
Invoice adjustment and cancellation
Formal procedures govern the correction and cancellation of erroneous invoices.
Adjustments are permitted where an invoice contains errors affecting the tax amount, where purchased goods are no longer available, or where prices change, or goods are returned.
Cancellation applies in more definitive circumstances — where a purchase did not proceed due to a price disagreement, where goods are entirely unavailable or unauthorised for sale, or where goods have been damaged.
Cancellation requests must generally be submitted before the close of the relevant tax period and will be rejected where that period has already been audited or where input tax has already been refunded.
Compliance and transition
The tax administration and financial institutions have three months from the Order’s publication to set up necessary portals and complete system integrations. This Order officially repeals Ministerial Order nº 001/17/10/TC of 30/01/2017, which previously governed industrial VAT exemptions.
