According to the tax laws of Rwanda, a permanent establishment means a fixed place of business through which the business of a person is wholly or partially carried on. A place of business generally includes:

A place of management;
A branch;
A factory or a workshop;
A mine, quarry or any other place for the exploitation of natural resources;
A building site or construction or a place where assembly or related supervision activities if carried on;
A place of provision of services, including consulting services, if such activities are carried on for more than 90 days within any 12-month period, either continuously or intermittently; and
An agent, other than an agent of an independent status, if such agent acts on behalf of the principal and exercises the authority to conclude contracts in the name of the principal, except if such activities are limited to maintaining a stock of goods for storage purposes.

Effective 28 October 2022, a permanent establishment includes:

A person on whose behalf another person acts and has the authority to negotiate or conclude contracts or plays the principal role leading to the conclusion of such contracts; and
An insurance entity, except in regard to reinsurance, if it collects premiums or insures risks through a person other than a broker in a capital market or an agent of an independent status.

However, a non-resident person is not considered as having a permanent establishment if the activities are carried out through an independent broker in the capital market, general commissionaire agent, or any other private agent acting in the ordinary course of his business, except when the activities are carried out wholly or almost wholly on behalf of the non-resident and the commercial and financial conditions for the brokerage or agency contract differ from those that would have been made between independent persons.

Furthermore, the carrying out of the following activities does not constitute a permanent establishment for the foreign enterprise in Rwanda:

Using of facilities for the storage or display of goods or merchandise belonging to the enterprise;
Maintaining a stock of goods or merchandise belonging to the enterprise for storage;
Maintaining a stock of goods or merchandise belonging to the enterprise for the sole purpose of being processed by another enterprise;
Using a fixed place of business for the sole purpose of purchasing merchandise or collecting information for the enterprise; or
Using a fixed place of business for the carrying out of activities of a preparatory or auxiliary character.

Finally, the fact that a company controls or is controlled by another company does not, of itself, constitute either company to be a permanent establishment of the other.

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