Open your background.jpg image in GIMP.
Go to Layers menu, then Transparency, then "Add alpha channel". That is adding the transparency information, which JPG doesn't have.
Then select your rounded rectangle, and press delete. That deletes everything within that selection, so it makes it transparent.
Then get your new photo, and paste it as a new layer. Use the layers toolbox to reorder the layers, make sure your background.jpg is top of the list, with the new photo beneath.
That should give you your background, with the new photo visible through the hole. You will probably have to move or resize the new photo to make it look nice.