Entity Setup
Understanding Rwanda’s Transfer Pricing Fix & Loss Carry-Forward Rules: Opportunities for Businesses
Rwanda’s new ministerial order clarifies loss carry-forward periods and simplifies accounting; key for entities operating in Rwanda or planning investment there.
By NomadicTax Research Team • 5-8 min read • August 24, 2026
## Rwanda’s new Ministerial Order in brief
By **Ministerial Order No. 003/26/10/TC** of **29 April 2026**, Rwanda tightened rules around:
- **Transfer pricing** – update of requirements for related-party pricing and documentation ([rra.gov.rw](https://www.rra.gov.rw/fileadmin/Folder_for_2025/Ministerial_Order_on_Simplified_Accounting_Method_April_2026.pdf?utm_source=openai)),
- **Simplified accounting methods** – for qualifying taxpayers to reduce compliance burden ([rra.gov.rw](https://www.rra.gov.rw/fileadmin/Folder_for_2025/Ministerial_Order_on_Simplified_Accounting_Method_April_2026.pdf?utm_source=openai)),
- **Loss carry-forward beyond five fiscal periods** – taxpayers may be authorised to carry forward assessed losses for more than five tax periods, if application approved. ([rra.gov.rw](https://www.rra.gov.rw/fileadmin/Folder_for_2025/Ministerial_Order_on_Simplified_Accounting_Method_April_2026.pdf?utm_source=openai)).
This order builds on the Income Tax Law (Law No. 027/2022) especially Articles 14, 31, and 32. ([rra.gov.rw](https://www.rra.gov.rw/fileadmin/Folder_for_2025/Ministerial_Order_on_Simplified_Accounting_Method_April_2026.pdf?utm_source=openai))
## Who should care and why
* Businesses with ownership by related parties—multinationals, or local firms with cross-shareholding—will need to strictly apply arms-length prices and maintain documentation.
* Startups or loss-making companies now know the potential for extending loss carry-forward beyond five years, helpful for planning capital investment or initial years without profit.
* Smaller/Rwanda-based businesses may opt for simplified accounting if they qualify, to reduce audit costs, reporting burden and time.
## Practical implementation steps for entities
1. **Evaluate qualification for simplified accounting** – check thresholds and criteria under the new order. If eligible, switch method and ensure your books follow the standard.
2. **Document related party transactions thoroughly** – transfer pricing documentation must adhere to Rwanda’s transfer pricing rules; comparables, pricing reports may be needed.
3. **Apply for extended loss carry-forward** if needed** – prepare a robust business case, maintain audit trail, and submit through usual channels early.
4. **Forecast tax cash flows over multiple years** – especially if expecting losses or periods of low profit; extended carry-forward can free funds for investment.
## Example scenario
A Rwandan tech scale-up spends heavily on R&D for five years and has not yet achieved stable profits. Before the order, losses could be carried forward only for five years. Under the new order, with proper application and documentation, the company may get extension—allowing it to offset profits in year six or beyond. That smooths investment planning and ensures less tax uncertainty.
## Considerations and risks
- The “authorization” requirement means loss carry-forward beyond five years isn't automatic—taxpayers must apply and meet certain standards.
- Simplified accounting may limit the kinds of deductions or expenses—sometimes less favourable if you have complex transactions.
- Improved scrutiny on transfer pricing will come with increased audit risk; penalties for non-compliance may increase.
## Summary
Rwanda’s recent order harmonises taxation expectations for businesses: it balances easing compliance through simplification, while tightening oversight especially for related party dealings. For investors, companies and nomads in Rwanda, updating accounting structures, documenting transactions, and projecting cash flows early are the keys to leveraging the new rules effectively.