How to Reclaim the VAT in RRA
A Value Added Tax (VAT) is a consumption tax on the incremental value added to goods and services and paid by registered traders. The final tax is paid or consumed by the end customer. The Rwanda Revenue Authority (RRA) introduced their VAT system in 2001. Traders are required to register as a VAT taxpayer when their annual turnover within a 12-month period is more than 20 million Rwandan Francs or is more than 5 million Rwandan Francs within the last quarter of the year. Registered traders are required to issue VAT invoices and file a monthly VAT return, and they can reclaim VAT if they paid more than they owed.
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Instructions
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Output Tax
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1
Total the sales invoices on all goods or services for business activity conducted in Rwanda. Compare the total with what is recorded on your ledger, and reconcile any differences. Enter the total on line 5 of the Monthly VAT Declaration Form.
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2
Total the exempt sales on agricultural products, educational materials or other exempt goods included in the total on line 5. Enter this amount on line 10. Total the zero rated sales, and enter the amount on line 15. Total the invoices for all exported goods and enter the amount on line 20. Enter the total of exempt sales, zero rated sales and export sales on line 25.
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3
Subtract the nontaxable sales on line 25 from the total sales entered on line 5. This is your taxable sales against which the VAT tax is calculated. Enter this amount on line 30. Multiply the amount by the tax rate of 18%. The result is the output VAT tax on your sales for the month. Enter the amount on line 35.
Input Tax
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4
Total the VAT paid on imports for the period and include this amount on line 40. Total the VAT tax the business paid to registered VAT traders for goods and services for the period. Include supplies for which VAT was paid at the time of purchase and later sold at the standard or zero rate.
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5
Exclude the VAT paid on goods and services that were for personal use. Review the VAT exemptions for the list of detailed items to exclude from the input tax.
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6
Total the VAT or input taxes you were charged on the purchase of goods and services for the month. Enter this amount as the VAT paid on input on line 50 of the Monthly VAT Declaration Form.
Refund or Liability
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7
Subtract the input VAT you paid on purchases from the output VAT on taxable sales. This is your net VAT tax. Enter the amount on line 55.
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8
Enter your unclaimed tax from the prior month on line 60. Enter the withholding from the Ministry of Finance and Economic Planning on line 65.
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9
Subtract from the net VAT tax the unclaimed credit on line 60 and the withholding on line 65. The result is the amount you can reclaim or that you owe RRA. Enter the refund claim on line 75. Enter the tax due on line 80. File the return with RRA.
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Tips & Warnings
Apportion the VAT paid on goods or services that were used for both personal and business use. For example, if your business is home-based, apportion an amount of the utilities, rent and repairs for business use.
References
Resources
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