Operating losses can be carried forward for 5 years. Effective 6 May 2019, losses which are not yet fully absorbed may be carried forward for an additional period not exceeding another 5 years (i.e., maximum of 10 years total), subject to the filing of a request to this end with the tax authorities. Certain taxpayers are allowed a carry-forward of tax losses for a period of 7 to 10 years with possible further extension upon request (see Sec. 10.).

Foreign-sourced losses are not allowed to be deducted /offset from either present or future domestic sourced business profits.

In case of a change in direct or indirect ownership of the share capital or the voting rights of an unlisted company by more than 25% in value or in number, then such company is not allowed to carry-forward losses related to the tax period during which the change occurred and previous tax periods, subject to certain exceptions (see Sec. 10.). However, effective 28 October 2022, losses can be carried-forward for up to 5 years if the change in ownership is the result of an internal business reorganization that maintains all the shareholders, provided that those shareholders have been in the shareholding structure for a period of not less than 3 years.

The carry-back of losses is not permitted in Rwanda, subject to certain exceptions. Losses incurred during a tax year in a long-term contract business can be carried back and offset against the previously taxed business profits from that contract to the extent it is not absorbed in the year of completion of the contract. Long-term contracts include contracts for manufacture, installation or construction, or for the performance of related services which may extend beyond 12 months.

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