Unless there is mutual permission, termination must be in writing. If an employee is terminated for egregious misconduct, he or she must be told within 48 hours after the occurrence of evidence of the same.

Unlawful termination can result in damages ranging from three to six months' salary for the injured person, but can reach nine months' compensation if the employment relationship lasted at least ten years.

Discipline may take the form of an oral warning, a written warning, a brief suspension, or termination.

Contracts with an indefinite duration may be terminated for cause, and written notice should be provided to the employee, except in the case of serious misconduct. The following are the notice requirements. A 15-day notice period is required for employees with less than one year of service. A one-month notice period is required for service of more than one year.

Six-month probationary periods are permitted. During the probationary period, no notice of termination is required.

After one year of service, employees are generally entitled to severance pay. Severance pay is paid in the following manner. Severance pay is equivalent to one month's salary for employees with less than five years of service. Severance pay for five to ten years of service is equivalent to two months' salary. Severance pay for 10-15 years of service is equivalent to three months' salary. Severance pay for 15-20 years of service is equivalent to four months' salary. Severance pay for 20-25 years of service is equivalent to five months' salary. Severance pay is equivalent to six months' salary for employees with more than 25 years of service.

Rwanda's compensation regulations include industry-specific minimum salaries. Individuals working in the tea business, for example, earn $0.83 a day, while workers in the construction industry earn anywhere from $2.50 to $8.30 per day.

Rwanda has both a source and a residence-based taxes system in place. This implies that any income considered to be derived from Rwandan sources will be subject to Rwandan taxation. Furthermore, resident entities are taxed on their global revenue. However, if such income is taxed in another country, a tax credit is given that does not exceed the tax due on the identical income in Rwanda.

Non-resident entities are taxed on revenue generated in Rwanda through a permanent establishment (PE). The usual rate of corporate income tax (CIT) is 30%. However, micro-enterprise firms (with less than 12 million Rwanda francs [RWF] in revenue in a tax period) pay flat tax amounts, while small businesses (with RWF 12 million to RWF 20 million in sales in a tax period) pay a lump sum tax at the rate of 3% of turnover.

Rwandan residents are taxed on their global earnings. Non-residents are taxed on income earned in Rwanda. Residents and non-residents are subject to the same tax rates.

A person's taxable income for any year is the sum of that person's income for the year minus the entire amount of deductions that person is permitted. Employment income, company earnings, and investment income are all examples of taxable income.

The current monthly personal income tax (PIT) rates are as follows.

For an income from RWF 0 to RWF 30,000, the tax rate is 0.

For an income between RWF 30,001 to RWF 100,000, the tax rate is 20 percent.

For an income beyond RWF 100,000, the tax rate is 30 percent.

VAT is imposed on both the supply of taxable goods and services in Rwanda and the importation of taxable goods and services into Rwanda.

The taxable turnover criteria for VAT registration is RWF 20 million in any relevant year or RWF 5 million in a calendar quarter. The normal VAT rate is 18% and applies to products and services that are neither exempt nor zero-rated from VAT.

VAT is levied at 0% on exports of goods and services. Supplies to privileged individuals, such as items imported for official diplomatic missions, supplies made under specific arrangements between the Rwandan government and donors, and supplies or imports made under special technical assistance agreements, are exempt from VAT. Persons eligible to zero rating on goods or supplies obtained must pay VAT at the time of receipt and then request for a refund of the VAT paid.

Some supplies are exempt from VAT, including water supply, health-related goods and services, educational materials and services, transportation services, books and newspapers, financial and insurance services, lending or leasing interests in land or buildings for residential purposes, funeral services, energy supplies, and all unprocessed agricultural and livestock products.

Suppliers that offer zero-rated services or products are allowed to reclaim the input VAT they paid in order to make the provision. In contrast, input VAT recovery is not permitted for exempt suppliers. As a result, a zero rating is preferable to exemption.

Monthly VAT returns and payments are required to the Rwanda Revenue Authority (RRA) by the 15th of the following month. Taxpayers with a yearly turnover of RWF 200 million or less, on the other hand, may choose to submit VAT returns or make payments on a quarterly or monthly basis.

Employers are not required by law to conduct pre-employment background checks. However, if an employer chooses to do a background check, it must adhere to Rwanda's data privacy rules.

Employment contracts may be for a set period of time or for an unlimited period of time. They may be written or oral, but they cannot be longer than 90 days.

Rwandan Franc