The Rwanda – Turkey Tax Treaty Enters Into Force

The Rwanda – Turkey Tax Treaty Enters Into Force

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

Personal Income Tax
Corporate Income Tax
Withholding taxes
Tax on rent of an immoveable property
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.

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