Rwanda and France have signed the Double Taxation Avoidance Agreement (DTAA), which serves as a foundation for creating a stable and favorable business environment for cross-border income between the two counties.

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The agreement was signed at the finance summit in Paris, France. Double taxation is a tax principle referring to income taxes paid twice on the same source of income.

It can occur when income is taxed at both the corporate level and personal level. Double taxation also occurs in international trade or investment when the same income is taxed in two different countries.

"The signed Double Taxation Avoidance Agreement is aligned to Rwanda’s medium-to-long-term objective of positioning itself as a thriving financial hub,” a statement from Rwanda’s Ministry in charge of finance and economic planning revealed.

Beyond attracting additional French investments to Rwanda and ensuring a predictable tax environment for existing ones, the Finance Ministry said that the Double Taxation Avoidance Agreement will foster outbound investments, curb illicit financial flows, and safeguard against discriminatory tax practices.

Most investors in the region describe double taxation as unrealistic, restrictive and eating into their profits.

In 2021, Rwanda and Luxembourg-another European country signed an agreement for the elimination of double taxation with respect to taxes on income and capital and the prevention of tax evasion and avoidance between the two countries.

As Kigali International Financial Centre (KIFC) is positioning itself to become a financial service hub for all investors coming to Africa, signing double taxation avoidance agreements with different countries facilitates investors to do business easily in Rwanda.