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Income tax - Corporate entities

Burundi

i) Corporation tax rates

Law no 1/02 of 24 January 2013 on direct taxes on incomeRate
Corporate tax standard rate 30%
Minimal tax on turnover if taxable profits is less than turnover divided by 30 1%
Incentives to registered investors
a. Profit tax discount of:
If investor employs between 50 and 200 Burundians 2%
If investor employs more than 200 Burundians
The discount is granted to investors only if they maintain the employees for a period of at least six months during a tax period and the category of employees are not those who pay PAYE at zero percent (0%).
5%
b. Any Investor in Free Trade Zone
Corporate income tax during the first 10 years of establishment 0%
Corporate income tax - starting from 11th year of establishment 15%
Corporate income tax - if investor employs more than 100 permanent Burundian Employees 10%
If investor reinvest more than 25% of profits realised during the 10 years of Existence 10%
Tax on dividends Exempted
All kind of Imports on the list submitted during registration Exempted
All kind of Exports on the list submitted during registration Exempted
c. Investor engaged in trade who operates in Free Trade Zone
Turnover tax during the first 10 years of establishment 1%
Turnover tax if employs more than 20 Burundian permanents jobs 0.80%
Repatriation of profits
Free repatriation
Interests in treasury bills
Interests on treasury bills Exempted
Exports - Tax discount N/A
Exempted activities
Agriculture and livestock activities are exempted Exempted
Fishery activities below 20 Million are exempted Exempted
Other Taxes
Security tax on imports 1.15%

ii) Capital deductions

Capital deductions - Tax DepreciationRate
Buildings at Cost (each asset is depreciated individually) 5%
Heavy machinery, boats, ships, airplanes at Cost (each asset is depreciated individually) 10%
Intangible assets including goodwill at Cost (each asset is depreciated individually) 10%
Computers and accessories, information and communication systems, software products and data equipment (under a pooling system and on declining balance) 50%
All other business assets (under a pooling system and on declining balance) 25%
Cost: This is defined to include cost of acquisition, the cost of improvement or construction and the cost of refining, rehabilitation, reconstruction development.
Investment allowance N/A

 

Kenya

i) Corporation tax rates

DescriptionRate
Resident corporation 30%
Non-resident corporation 37.5%
Export Processing Zone:
i) first 10 years Nil
ii) next 10 years 25%
Registered Unit Trusts / Collective Investment schemes Exempt subject to conditions
Newly listed companies approved under the Capital Markets Act:
With 20% issued shares listed. For the first 3 years after listing 27%
With 30% issued shares listed. For the first 5 years after listing 25%
With 40% issued shares listed. For the first 5 years after listing 20%
Special rates on gross income of non-residents derived in Kenya:
Transmission of messages 5%
Ownership or operation of a ship 2.5%

ii) Capital deductions (writing down allowances)

Capital deductionsRate
Investment deduction:
Qualifying investment exceeding Kshs 200 million (outside Nairobi, or the Municipalities of Mombasa or Kisumu) 150%
Other qualifying investment 100%
Industrial building allowance:
Hostels and certified education buildings (straight line) 50%
Qualifying rental residential or commercial buildings (straight line) 25%
Other qualifying buildings (including hotels, straight line) 10%
Wear and tear allowance:
Plant and machinery (reducing balance)
Class 1 (Heavy earth moving equipment, tractors and combine harvesters) 37.5%
Class 2 (Other self-propelling motor vehicles) 30%
Class 3 (computers and peripheral computer hardware) 25%
Class 4 (All other equipment including furniture) 12.5%
Telecommunication equipment (straight line) 20%
Other allowances:
Computer software (straight line) 20%
Capital expenditure under a concession airing arrangement Equal proportions over the period of concession
Mining specified minerals; Year one 40%
Mining specified minerals; Year two to seven 10%
Farm works (straight line) 100%

 

Rwanda

i) Corporation tax rates

DescriptionRate
The general corporate tax rate for resident companies 30%
However, a registered investment entity that operates in a Free Trade Zone and foreign companies with headquarters in Rwanda who fulfil the requirements stipulated in the Investment code of Rwanda is entitled to the following preferential tax rates:
  • Pay corporate income tax at
0%
  • Exemption from withholding tax
  • Tax free repatriation of profits
Companies that carry out micro finance activities pay corporate income tax for a period of five years. The period is renewable by the order of the minister. 0%
A registered investor is entitled to a profit tax discount of:
  • 2% if investor employees between 100 and 200 Rwandans
  • 5% if investor employees between 201 and 400 Rwandans
  • 6% if investor employees between 400 and 900 Rwandans
  • 7% if investor employees more than 900 Rwandans
The discount is granted to investors only if they maintain the employees for a period of at least six months during a tax period and the category of employees are not those who pay PAYE at zero percent (0%)
Newly listed companies
Newly listed companies on capital market shall be taxed for a period of 5 years on the following rates:
i. if those companies they sell at least 40% of their shares to the public; 20%
ii. if those companies sell at least 30% of their shares to the public; 25%
iii. if those companies sell at least 20% of their shares to the public. 28%
Venture capital companies registered with the Capital Markets Authority in Rwanda benefit from a corporate income tax of zero percent (0%) for a period of five (5) years from the date the decision has been taken.
Exports-Tax discount
Export of commodities and services that bring to the county revenue of:
Between US$ 3m and US$ 5m qualify for a tax discount of 3%
More than US$ 5m qualify for a tax discount of 5%
A new tax regime for SMEs in the form of a flat tax rate has been introduced. The new SME tax regime groups SMEs in two categories with the following tax rates:
1. SMEs with turnover of 12 million to Rwf 50 Million, now pay a flat tax rate of 3%
2. Micro enterprises with turnover of Rwf 12 million or less are now grouped into four bands with tax amounts payable as follows:
  • From 10-12 Million will pay Rwf 300,000
  • 7-10 Million will pay Rwf 210,000
  • 4-7 Million will pay Rwf 120,000
  • 2-7 Million will pay Rwf 60,000
3. Taxpayers with annual turnover equal to Rwf 200 Million can opt to declare and pay PAYE on a quarterly basis

ii) Capital deductions

Capital deductionsRate
Buildings, plant and equipment (each asset on its own on a straight line basis) 5%
Intangible assets including goodwill (each asset on its own on a straight line) 10%
Computers and accessories, information and communication systems, software products and data equipment (under a pooling system on straight line basis) 50%
All other business assets (under a pooling system on straight line basis) 25%
Investment allowance
  • If registered business is located in Kigali
40%
  • If registered business is located outside Kigali or falls within the priority sectors determined by the Investment Code of Rwanda
50%

 

United Republic of Tanzania

i) Corporation tax rates

DescriptionRate
Resident corporation 30%
Non-resident corporation 30%
Newly listed companies - reduced rate for 3 years 25%
Alternative minimum tax 0.3%

ii) Capital deductions

Capital deductionsRate
Buildings (straight line)
Used in Agriculture or livestock / fish farming 20%
Other 5%
Plant and machinery (initial allowance)
Used in Manufacturing (first year allowance) 50%
Used in Agriculture 100%
Plant & machinery (reducing balance)
Class 1 37.5%
Class 2 25%
Class 3 12.5%
Intangible assets (straight line) Over useful life
Agriculture - improvements / research and development 100%
Mining exploration and development 100%
Equipment used for prospecting and exploration of minerals or petroleum 100%

 

Uganda

i) Corporation tax rates

DescriptionRate
Resident corporation 30%
Non-resident corporation 30%
Repatriated income of a branch 15%
Collective Investment Schemes Exempt
Non-resident shipping, air and road transport operators and embarking goods in Uganda 2%
Direct-to-home pay television services and internet broadcasting 5%
Operation of aircraft in domestic and international traffic or leasing of aircraft Exempt
Presumptive tax is the final tax for the taxpayer Gross Turnover Rates
Less than UShs 5 million Nil
Between UShs 5 million and UShs 20 million UShs 100,000

ii) Capital deductions

Capital deductionsRate
Industrial Buildings / Hotels / Hospitals:
Initial allowance 20%
Annual write-down allowance (straight line) 5%
Plant and machinery (Initial allowance):
Entebbe, Jinja, Kampala, Namanve, Njeru (the allowances are lower in these areas to decentralise) 50%
Other areas 75&
Plant, machinery and vehicles (annual allowance, on reducing balance):
Year 1 20%
Year 2 30%
Year 3 35%
Year 4 40%
Commercial Buildings (Annual allowance on straight basis) 5%
Mining companies are charged at income tax rates ranging from 25% to 45% depending on company’s ratio of chargeable income to gross revenue in the year of income. 25% to 45%
Between UShs 20 million and UShs 30 million Lower of UShs 250,000 or 1% of gross turnover
Between UShs 30 million and UShs 40 million Lower of UShs 350,000 or 1% of gross turnover
Between UShs 40 million and UShs 50 million Lower of UShs 450,000 or 1% of gross turnover

East African Community
EAC Close
Afrika Mashariki Road
P.O. Box 1096
Arusha
United Republic of Tanzania

Tel: +255 (0)27 216 2100
Fax: +255 (0)27 216 2190
Email: eac@eachq.org