Rwanda, Hong Kong ink new tax pact: Here is what it means for economy

Rwanda and Hong Kong have signed a Double Taxation Avoidance Agreement (DTAA) aimed at eliminating double taxation, preventing tax evasion, and strengthening economic cooperation. The agreement, signed in Hong Kong on Thursday, October 9, is expected to increase investor confidence and make cross-border business smoother, according to the agreement. ALSO READ: Hong Kong, Rwanda business communities discuss opportunities The agreement was signed by Yusuf Murangwa, Rwanda’s Minister of Finance and Economic Planning, and Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong. This is important because under the treaty, seen by The New Times, income from business, employment, or investment will be taxed in the country where it is earned, without facing additional taxation at home. The DTAA also sets reduced withholding tax rates on cross-border payments, including dividends up to 7.5%, interest up to 8%, royalties up to 9%, and fees for technical services up to 10%. Public entities such as Rwanda’s National Bank, RSSB, Agaciro Development Fund, and Development Bank of Rwanda, as well as Hong Kong’s Monetary Authority and Exchange Fund, will be fully exempt from these taxes. Both governments will share relevant tax information to strengthen enforcement and combat tax evasion, while ensuring strict confidentiality. A protocol accompanying the treaty extends these provisions to additional taxes in Rwanda, including Value Added Tax, Excise Duty, Tax on Minerals, and Gaming Tax. Investors will continue to benefit from existing tax incentives for up to five years after the treaty takes effect. The agreement also introduces a Mutual Agreement Procedure for resolving disputes, ensuring companies or individuals are not taxed inconsistently with the treaty. The DTAA is scheduled to take effect from January 1, 2026, in Rwanda, and April 1, 2026, in Hong Kong.

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Rwanda, Hong Kong ink new tax pact: Here is what it means for economy