Tanzania – Lovat Compliance

Vat standard rate

The standard VAT rate in Tanzania is 18% and applies to goods and imports.

Vat zero rate

VAT zero rate applies to export transactions.

In particular, zero-rated operations include:

Export of services;
Export of goods;
Transportation services related to transit through the country.

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Threshold

Companies with annual turnover exceeding TZS200 million (approximately USD 81,600) in the twelve months must register as VAT payers. The application must be submitted within 30 days of reaching the turnover threshold.

Deductible VAT

If the amount of input tax exceeds the amount of output tax and this surplus has been carried forward for more than six months, the taxable company may request a refund. The amount of the refund must be equal to or greater than TZS100,000.

Registration procedure

An application for VAT registration must be submitted 30 days after the threshold is exceeded. The application can be submitted both in paper form and online. The period for reviewing an application for registration is 15 days.

Tax representative

Non-resident companies that do not have a permanent establishment in Tanzania are required to appoint a local tax representative to act on behalf of the company and fulfill all necessary obligations.

Keeping records

The retention period for VAT-related documents, including invoices, books, tax returns and other records, should be kept for 5 years after the end of the tax period or longer if required by the Tanzanian tax authorities.

Filling VAT return and payment date

VAT returns must be filed and paid on a monthly basis. Filing and payments must be made by the 20th day of the month following the tax month, unless that day is a public holiday or a weekend, in which case they must be filed on the next business day.

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VAT standard rate

The VAT standard rate in the Tanzania is 18%

Threshold

Non-resident digital service providers whose annual revenue exceeds TZS 200 million (approximately USD 81,600) must register as VAT payers. The application must be submitted within 30 days of reaching the turnover threshold. This condition does not apply to professional service providers.

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Deductible VAT

Non-resident companies that provide digital services in Tanzania cannot receive VAT refunds.

Pieces of evidence

In order to determine that the place of supply of electronic services is Tanzania, it is necessary to provide services to any person residing or conducting business in Tanzania, and at the time of supply of services, their Internet address is located in the territory of the country.

E-services list

The list of digital services includes the following:

Online platforms
Databases
Graphics, written content, and data
Hosting services
Digital learning resources
Downloadable digital content
Audio, video, and interactive entertainment, including gaming experiences
Public dissemination of political, cultural, artistic, sports, scientific, and miscellaneous content, including televised broadcasts

and other services that are related to the above.

Registration procedure

The application for VAT registration must be submitted within 30 days after the threshold is exceeded. The application for non-resident digital service providers must be submitted online in the appropriate form. The application is processed within 15 days.

Tax representative

Non-resident companies providing digital services in Tanzania are required to appoint a local tax representative who, in turn, must have a valid tax number, a valid representative’s declaration, and the right to conduct VAT business with non-residents of the country.

Keeping records

The retention period for VAT-related documents, including invoices, books, tax returns, and other records, must be kept for 5 years after the end of the tax period or longer if required by the Tanzanian tax authorities. Reporting can also be done electronically, but this requires a primary data server that stores all the necessary information about the taxpayer and its business activities.

Filling VAT return and payment date

The period for filing and paying VAT in Tanzania is one month. Returns and payments are due by the 20th day of the month following the reporting period, unless that day is a public holiday or a weekend, in which case the declarations must be filed on the next business day.

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