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06 September 2018 Rwanda issues guidelines on trade payables and accruals On 29 August 2018, the Commissioner General of the Rwanda Revenue Authority issued a ruling which provides guidance on payables and accruals that exceed six months. Article 60 of the Law No. 016/2018 of 13 April 2018 establishing taxes on income provides that money which is recorded in the books of accounts as a liability of a taxpayer to creditors and which reduces the taxable income is deemed a payment if it has exceeded six months following the tax period. The clarity sought by taxpayers was the definition of the term "tax period" from when the six months started counting for withholding tax purposes. In the ruling, the Commissioner General indicated that the tax period starts on 1 January and ends on 31 December. Hence, all payables and accruals which remain unpaid within the six months after the end of a tax period, will be deemed to have been paid and as such subject to withholding tax. The withholding tax will be due and payable on the 15th of the 7th month. Document ID: 2018-6055 |
