On 24 May 2021, Turkey published Presidential Decision No. 4018 in their Official Gazette. This Decision provides that the double taxation treaty between Rwanda and Turkey entered into force. The Turkey-Rwanda tax treaty was signed back on 1 December 2018. As per the Presential Decision, the treaty entered into force on 21 October 2020 but the effective date is from 1 January 2021.
Here are some important details of the Turkey-Rwanda tax treaty.
1. Taxes Covered
Rwanda:
Personal Income Tax
Corporate Income Tax
Withholding taxes
Tax on rent of an immoveable property
Turkey:
Income Tax
Corporate Tax
2. Wittholding Tax Rates
Dividends – 10%
Interest – 10%
Royalties – 10%
Technical Service Fees – 10%
3. Special Provision for Dividends/Profits
Article 10 (Dividends) includes a provision that where a company resident of a Contracting State (either Turkey or Rwanda), has a permanent establishment in the other Contracting State, the profits taxable under Article 7 (Business Profits) may be subject to an additional tax in that other State, but the additional charge shall not exceed 10% of the amount fo those profits.
4. Permanent Establishment (PE)
A PE will be created when a company furnishes services through employees or other engaged personnel if the activities continue for a period or periods aggregating more than 183 days within a 12 month period. These activities should be for the same or connected project.
The Tax App To Manage Compliance
