Any person who sets up a business or other activities that may be taxable is obliged to register with the Tax Administration within a period of seven (7) days from the beginning of the business activity.
A company may be owned by an individual or group of persons, registration is done Rwanda Development Board (RDB) via online services. This service is immediate and free of charge. After company registration, certificate is issued by RDB.
Also for individual businesses, registration can be done by RRA and Tax Identification Number (TIN) certificate is issued freely at countrywide spread RRA branches. There is an RRA office at all 30 districts of Rwanda.
Every taxable business activity with a turnover exceeding Twenty Million Rwanda Francs (Rwf20m) in the previous fiscal year or Five Million (Rwf5m) in the preceding quarter is required by law to register for VAT within a period of seven (7) days from the end of the year or quarter respectively.
Based on the above point, a business that has registered for VAT is legally obliged to acquire an EBM with immediate effect because issuing any other invoice other than the electronic one or not issuing it attracts penalties.
Businesses not meeting the above requirements may register for VAT voluntarily and thus acquire EBM to meet the law provisions.
Any changes, whether related to the taxpayer or line of business shall be notified in writing to the tax administration within seven (7) days from the day of the notice of the change.
For example; if ownership of the business is transferred from Mr. A to B or changes from trading in business to hardware. Failure to make the nonfictions contravenes the law and attracts penalties.
The Commissioner General issues instructions regarding the registration and cancellation of registration on persons who no longer carry out business activities.
Rights of a registered business:
· Base of application for tax clearance certificate to participate in income enhancing activities such as bidding, obtaining a loan
· Base of application for Quitus Fiscale
· Base of interaction with Tax Administration, benefiting for Trainings on tax matters
· Base of transfer of title for movable assets
Obligations of a registered business:
a) Centralized Taxes:
· Must file tax returns such as Personal Income Tax (PIT), Corporate Income Tax (CIP), VAT (for those registered for VAT), PAYE (for those qualifying), Consumption Tax (for those qualifying), Withholding Tax of 3% and 15% for those qualifying.
· Each tax declared must be paid immediately as provided by the law.
b) Decentralized Taxes:
· Must file these taxes and Fees: Trading License Fees, Fixed Assets Tax, Rental Income Tax and Cleaning Fees.