The government has introduced new regulations expanding Value Added Tax (VAT) obligations to a wide range of digital services and products. The new rules were set out in a ministerial order dated April 29, 2026 and published in the Official Gazette the same day. It is grounded in the 2023 VAT law as amended and was approved by Cabinet on April 2, 2026. ALSO READ: Govt introduces VAT on digital goods, services Here are 10 key things you should know about the new rules: 1. Online services will now attract VAT The new rules make many goods and services supplied online subject to VAT if they are considered consumed in Rwanda, targeting digital businesses operating both inside and outside the country. Taxable services include software updates, ride-hailing apps, online gaming, search engines, online courses and webinars, music and film streaming platforms, digital subscriptions, web hosting services, and online broadcasts or events. The rules also apply to goods and services sold through digital marketplaces and internet-based platforms. However, education services already exempted under existing law will remain exempt. ALSO READ: Rwanda imposes tax on Netflix, Amazon, other foreign digital services 2. Foreign digital companies must register for VAT Online companies based outside Rwanda but offering taxable digital services to people in Rwanda will now be required to register for VAT. This means international platforms providing services such as streaming, online advertising, software subscriptions, web hosting, digital learning, or online marketplaces to Rwandan users may fall under Rwanda’s tax system. The regulations also allow foreign companies that do not have a physical presence in Rwanda to appoint local representatives to handle their tax registration, filing, and payment obligations on their behalf. 3. Rwanda will determine digital consumption using user data To establish whether a service is supplied in Rwanda, authorities may examine information linked to the consumer, including billing or residential addresses, internet protocol (IP) addresses, mobile phone SIM country codes, bank account details, and payment information used during the transaction. For example, if a person in Rwanda subscribes to an international streaming platform, pays using a Rwandan bank account or mobile payment method, and accesses the service through a Rwandan internet connection, the service may be treated as consumed in Rwanda and therefore taxable. 4. Consumers can apply for VAT refunds in certain situations The consumers can request refunds on VAT paid for online goods or services under specific circumstances, particularly where a transaction is reversed or the value of the service changes after payment. A consumer may apply for a refund within 60 days from the date of payment if an online purchase is cancelled, part of the payment is returned, or the final cost of the taxable service is reduced. Tax authorities may approve the refund if the consumer provides sufficient evidence showing that the money was returned to their account or that the original taxable amount changed. This could apply to situations such as cancelled subscriptions, reversed online payments, refunded digital purchases, or adjustments made to billed services. 5. Banks and payment platforms could help collect VAT The new regulations place responsibility for collecting and remitting VAT on online transactions either on the digital service provider or, in some cases, on the financial institution processing the payment. Where an online supplier is registered in Rwanda, or has an authorised local representative, the company will be responsible for charging VAT to customers and sending the tax to the Rwanda Revenue Authority (RRA). However, if the foreign supplier is not registered in Rwanda, the responsibility may shift to banks, mobile money operators, card payment companies, or other financial institutions facilitating the transaction. In such cases, the financial institution may withhold the VAT directly during payment and remit it to the tax administration. The regulations also require financial institutions and tax authorities to integrate their systems to allow information sharing and tracking of VAT payments linked to digital transactions. 6. Conditions for correcting and canceling VAT invoices The new regulations introduce tighter procedures for adjusting invoices that contain mistakes affecting VAT calculations. An invoice may only be adjusted if it contains incorrect information that changes the amount of tax charged, such as pricing errors, wrong tax rates, or inaccurate transaction details. In most cases, an invoice can only be corrected once unless the tax administration grants special authorisation. Both buyers and sellers are allowed to apply for invoice adjustments. However, the request must generally be made before VAT returns linked to that invoice are filed with the tax administration. If the mistake is discovered after VAT declarations have already been submitted, the taxpayer will need approval from the tax administration before making any correction.
