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Trading License
The trading licence tax is paid by any person that opens a business activity within a district. It applies to head offices, branches, and individual traders.
The trading license tax is calculated based on the turnover that includes sales from EBM system and other sales for the period of January to December of the previous year. For other business oriented activities whose turnover is below 2.000.000Frw and others which are not registered on income tax, the trading license is determined based on location (urban or rural).
Trading license rates are determined as follows:
| Profit-oriented activities basing on their tax on turnover | |
| Turnover Range (FRW) | Annual Tax Due (FRW)/Quarter |
| 50 billion and above | 2,000,000/500.000 |
| From 25.000.000.000 to 50.000.000.000 | 1.500.000/375.000 |
| From 1.000.000.000 to 25.000.000.000 | 1.000.000/250.000 |
| From 200.000.000 to 1.000.000.000 | 500.000/125.00 |
| From 20.000.000 to 200.000.000 | 280.000/70.000 |
| From 12.000.000 to 20.000.000 | 160.000/40.000 |
| Other profit-oriented activities | |
| Activities | Annual Tax Due (FRW)/Quarter |
| Profit-oriented activities not registered on income tax, in urban zone. | 60.000/15.000 |
| Profit-oriented activities not registered on income tax, in rural zone | 30.000/7.500 |
| Individual transport activities by vehicle | 40.000/40.000 |
| Transport activities by boat | 20.000/5.000 |
| Transport activities by motor cycle | 8.000/2.000 |
A new taxpayer who opens a business activity declares and pays the trading license tax basing on the starting capital.
Micro and small enterprises in their first two years of operation and non-commercial public institutions are exempt from the trading license tax.
The immovable property tax declaration is done through the Rwanda Automated Local Government Taxes Management System not later than 31st January of the year that corresponds to the tax period.
The trading license can be declared and paid either annually or quarterly. If a taxpayer opts to pay annually, the tax must be paid not later than January 31. For quarterly payments, the deadline for the payment of the first quarter is also January 31. For other quarterly payments, the Second quarter is due by April 30, the Third by July 31, and the fourth by October 31, of the tax year.
Trading license tax declaration for the head office and operating branches
- If a taxpayer has a head office and more than one branches (same business activities) in the same district: One of the branches pays the trading license based on the general turnover of those business activities.
- If a taxpayer has same business activities in different districts: The trading license is paid in each district (each branch pays the trading license based on their turnover).
- In case a taxpayer has different business activities in the same building: only one of them pays the trading license based on the general turnover of those business activities.
- In case a taxpayer has same business activities in the same building: the trading license is paid by one of them based on the general turnover of those business activities.
- In case a taxpayer has different business activities in the same district: each of the them pays the trading license based on their turnover.
However, a vehicle registered in the name of a taxpayer engaged in various activities (a taxpayer who is registered on income tax) and used in the business of that taxpayer does not pay the trading license.
After the declaration, the trading license can be paid through the following methods: Mobile Money, Airtel Money, MobiCash, Internet Banking or Mobile Banking.