Tax rate by region Tanzania

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The information provided on this page is intended for general informative purposes only. It should not be interpreted as tax advice, nor is it meant to be. For advice on your particular tax responsibilities, consult with an experienced tax expert. PayPro Global does not assume any responsibility for any action taken or not taken based on the information presented here.

Tanzania implements a multi-rate Value Added Tax (VAT) framework under the Tanzania Revenue Authority (TRA), which separates its rules by customer type and payment method. The general standard VAT rate in Mainland Tanzania is 18%, but a reduced rate of 16% is extended to business-to-consumer (B2C) online purchases, provided the customer pays via a bank or electronic payment system approved by the Commissioner General. For cross-border digital and electronic commerce, non-resident B2C providers face a “first-sale” rule requiring immediate local registration via the TRA online portal, completely bypassing the TZS 200 million annual threshold applied to domestic businesses.

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Tanzania

Tanzania applies a Value Added Tax (VAT) at a standard rate of 18% in Mainland Tanzania, with a reduced rate of 16% on specified B2C purchases paid via approved electronic payment systems. Non-resident suppliers of B2C electronic services have no threshold and must appoint a VAT representative.

Official government link: Tanzania Revenue Authority (TRA)

18.00%

E-products and services VAT/Sales tax rate

16%

Reduced tax rate

Reduced tax rate product categories

B2C purchases via electronic payment systems

Tax applicable for

B2B and B2C

Reverse charge mechanism for B2B sales

Yes

Tax ID validation required

Yes

When do you have to register

After first sale

Online registration possible

Yes 

Local representative needed

Not mandatory

Registration procedure

Register with TRA; non-residents must appoint a VAT representative; standard TRA online registration process

List of digital and electronic services liable for tax

Non-resident suppliers of B2C electronic services, online marketing platforms, non-resident online payment service providers

Penalties

Late filing/payment: 200 currency points (TZS 4,000,000), plus interest. 

Registration threshold

No threshold

Filing interval

Monthly

Filing deadline

7th day of the month following the reporting period

E-invoicing requirements

Not mandatory

Record keeping

5 years 

How-To Guides: Tanzania SaaS VAT

Step: 1 Threshold

Effective July 1, 2015, Tanzania requires non-resident vendors of digital services to consumers (B2C) in Tanzania to register for and collect VAT if their sales exceed TZS 100 million.

 

Effective July 1, 2022, Tanzania implemented a simplified registration process for non-resident digital services providers.

 

There is no registration threshold for non-resident suppliers of electronic services. Registration is mandatory if you supply digital services to consumers in Tanzania.

Step: 2 Business Registration

Register online via the Tanzania Revenue Authority (TRA) portal using the simplified registration framework for non-residents. You must register for both VAT and Income Tax (DST).

 

Step: 3 TIN/VAT Number

Upon registration, you will be issued a Taxpayer Identification Number (TIN) and a VAT Registration Number (VRN).

Step: 1 Standard Rate

The standard rate in Tanzania is 18%.

Step: 2 Rate Formula

To calculate your tax amounts, use the following formula:

 

Tax Amount = Net Price x 18%

 

Step: 3 Reverse Charge (B2B)

Yes. For B2B transactions with Tanzanian registered persons, imported-services / tax-accounting rules apply. Where the non-resident supplier is not charging VAT under the non-resident electronic-services regime, the Tanzanian business customer accounts for the tax locally.

Step: 1 Selling B2C

You must charge 18% VAT on all digital services supplied to individual consumers. You are also liable to pay 2% DST on the gross payment received.

 

 

 

Step: 2 Selling B2B

• Registered Buyer: Do not charge VAT. The buyer accounts for the tax locally.
• Unregistered Buyer: Treat as a B2C transaction and charge 18% VAT.

Step: 3 Invoice Requirements

Non-residents are exempt from EFD requirements, but should issue commercial invoices / receipts containing core transaction details, including supplier details, customer details where relevant, description, currency, and VAT amount where charged.
• Supplier Name, Address & VRN
• Customer Name & VRN (for B2B)
• Date & Serial Number
• Description of Services
• VAT Amount & Currency

Step: 1 Filing Interval

Returns are filed Monthly.

Step: 2 Filing Deadline

Returns (both VAT and DST) must be submitted by the 7th day of the month following the reporting period (e.g., April 7 for March).

Step: 3 Submission

File the simplified returns online via the TRA Taxpayer Portal. Payments must be made via bank transfer (SWIFT) to the TRA designated account in convertible currency.

Step: 4 Record Keeping

Maintain records for a minimum of 5 years.

PayPro Global Solution: Simplified Registration & Fiscal Representation

Navigating Tanzania’s VAT registration and fiscal representation can be daunting. PayPro Global acts as your Merchant of Record, handling these complexities, including VAT registration and fiscal representation where needed, so you can focus on your business.

Learn more about our MoR services.

FAQ

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