Therefore, a resident individual in Rwanda who is an employee of a foreign company will be subject to tax on his/her virtual employment income.Ĭonversely, employment income received from a foreign employer who is not a resident in Rwanda by a non-resident individual for the performance of services in Rwanda is not taxable.
Regarding employment income-related taxes applicable to remote employees based in Rwanda the Income Tax Law observes that for a person to be subjected to these taxes he/she has to first qualify as a “tax resident” of Rwanda.Īn individual is a tax resident of Rwanda if that person either has a permanent residence in Rwanda, he/she has a habitual abode in Rwanda or that person was in Rwanda for 183 days or more in a period of 12 months, either continuously or intermittently. This law suggests that a foreign company that has a remote employee residing in Rwanda with a vested capacity to enter into contracts on behalf of the company creates a PE in regards to the activities performed by the remote employee.Īccordingly, profits made by the employer proportional to the activities undertaken by the remote employee will be treated as having accrued in Rwanda for that tax period and is, therefore, taxable in Rwanda.
According to Rwanda’s Income Tax Law,2018, where an employee concerned acts on behalf of the employer and has the capacity to make contracts in the name of the employer, that employer is considered as if he/she owns a permanent establishment in respect of activities his/her agent/ employee undertakes for her/ him.
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